S-1/A 1 a2211291zs-1a.htm S-1/A

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As filed with the Securities and Exchange Commission on October 17, 2012

Registration No. 333-181370

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



AMENDMENT NO. 5

TO

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



Lehigh Gas Partners LP
(Exact name of registrant as specified in its charter)



Delaware
(State or other jurisdiction of
incorporation or organization)
  5172
(Primary Standard Industrial
Classification Code Number)
  45-4165414
(I.R.S. Employer
Identification Number)

702 West Hamilton Street, Suite 203
Allentown, PA 18101
(610) 625-8000

(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

Joseph V. Topper, Jr.
702 West Hamilton Street, Suite 203
Allentown, PA 18101
(610) 625-8000
(Name, address, including zip code, and telephone number, including
area code, of agent for service)



Copies to:

Richard A. Silfen
Chad J. Rubin
Duane Morris LLP
30 S. 17th St.
Philadelphia, Pennsylvania 19103
(215) 979-1000

 

Brenda K. Lenahan
Alan P. Baden
Vinson & Elkins L.L.P.
666 Fifth Avenue
26th Floor
New York, New York 10103
(212) 237-0000



Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.

          If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    o

          If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

          Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý
(Do not check if a
smaller reporting company)
  Smaller reporting company o

          The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

   


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The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission becomes effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion, Dated October 17, 2012

PRELIMINARY PROSPECTUS

6,000,000 Common Units

LOGO

Representing Limited Partner Interests



          This is our initial public offering. We are offering 6,000,000 common units. Our common units have been approved for listing on the New York Stock Exchange under the symbol "LGP."

          Prior to this offering, there has been no public market for our common units. We currently estimate that the initial public offering price will be between $19.00 and $21.00.

You should consider the risks which we have described in "Risk Factors" beginning on page 24.

          These risks include the following:

    We may not have sufficient cash from operations to enable us to pay the minimum quarterly distribution following establishment of cash reserves and payment of fees and expenses, including payments to our general partner. The minimum quarterly distribution is an amount that must be paid to holders of our common units, including any arrearages, before any distributions may be made to holders of our subordinated units, to the extent that any distributions are made.

    Our general partner may modify or revoke our cash distribution policy at any time. A modification or revocation may result in no distributions being paid to our unitholders, regardless of the amount of cash available for distribution.

    A decline in demand for motor fuels could adversely affect our results of operations and cash available for distribution to our unitholders.

    The Topper Group indirectly controls our general partner, which has sole responsibility for conducting our business and managing our operations. Our general partner and its affiliates, including the Topper Group and Lehigh Gas Corporation, have conflicts of interest with us and limited fiduciary duties, and they may favor their own interests to the detriment of us and our unitholders.

    Holders of our common units have limited voting rights and are not entitled to elect our general partner or its directors, which could reduce the price at which the common units will trade.

    Unitholders will experience immediate and substantial dilution of $19.78 per common unit.

    There is no existing market for our common units, and a trading market that will provide you with adequate liquidity may not develop. The price of our common units may fluctuate significantly, and unitholders could lose all or part of their investment.

    Unitholders' share of our income will be taxable to them for U.S. federal income tax purposes even if they do not receive any cash distributions from us.

    Our tax treatment depends on our status as a partnership for U.S. federal income tax purposes. If the Internal Revenue Service were to treat us as a corporation for U.S. federal income tax purposes, or if our income were to otherwise be subject to a material amount of additional entity-level income, franchise or other taxation for U.S. federal, state or local tax purposes, then our cash available for distribution to our unitholders would be substantially reduced.



 
  Per Common
Unit
  Total  

Initial public offering price

  $     $    

Underwriting discounts (1)

  $     $    
           

Proceeds (before expenses) to us

  $     $    
           

(1)
Excludes a structuring fee equal to 0.50% of the gross proceeds of this offering payable to Raymond James & Associates, Inc. Please read "Underwriting" beginning on page 214 of this prospectus.



          The underwriters may purchase up to an additional 900,000 common units from us at the public offering price, less the underwriting discount, within 30 days from the date of this prospectus to cover over-allotments.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

          The underwriters expect to deliver the common units to the purchasers on or about                  , 2012.



RAYMOND JAMES
              BAIRD    
           OPPENHEIMER & CO.    
        JANNEY MONTGOMERY SCOTT
            WUNDERLICH SECURITIES

   

The date of this prospectus is                           , 2012.


        The following map illustrates the geographic locations as of September 1, 2012 of the sites that we own, lease from an affiliate of Getty Realty Corp. ("Getty") and lease from third parties other than Getty:

GRAPHIC


Table of Contents

 
  Page

SUMMARY

  1

RISK FACTORS

  24

USE OF PROCEEDS

  55

CAPITALIZATION

  57

DILUTION

  58

CASH DISTRIBUTION POLICY AND RESTRICTIONS ON DISTRIBUTIONS

  59

HOW WE MAKE DISTRIBUTIONS TO OUR PARTNERS

  73

SELECTED HISTORICAL AND PRO FORMA COMBINED FINANCIAL AND OPERATING DATA

  88

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

  93

INDUSTRY

  118

BUSINESS

  123

MANAGEMENT

  141

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

  153

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

  155

CONFLICTS OF INTEREST AND FIDUCIARY DUTIES

  163

DESCRIPTION OF COMMON UNITS

  171

THE PARTNERSHIP AGREEMENT

  173

UNITS ELIGIBLE FOR FUTURE SALE

  189

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

  190

INVESTMENT BY EMPLOYEE BENEFIT PLANS

  213

UNDERWRITING

  214

VALIDITY OF OUR COMMON UNITS

  219

EXPERTS

  219

WHERE YOU CAN FIND MORE INFORMATION

  219

FORWARD-LOOKING STATEMENTS

  220

FINANCIAL STATEMENTS

  F-1

APPENDIX A: FORM OF FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP LEHIGH GAS PARTNERS LP

  A-1

APPENDIX B: GLOSSARY OF TERMS

  B-1

        You should rely only on the information contained in this prospectus, any free writing prospectus prepared by or on behalf of us or any other information to which we have referred you in connection with this offering. We have not, and the underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where an offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate as of the date on the front cover of this prospectus only. Our business, financial condition, results of operations and prospects may have changed since that date.



        Until                           , 2012 (25 days after the date of this prospectus), all dealers that buy, sell or trade our common units, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.



KEY REFERENCES

        References in this prospectus to "our predecessor" refer to that portion of the business of Lehigh Gas Corporation, or "LGC," and its subsidiaries and affiliates that is being contributed to Lehigh Gas Partners LP, as further described in "Summary—The Transactions." Unless the context requires otherwise, references in this prospectus to "our partnership," "Lehigh Gas Partners LP," "we," "our," "us," or like terms, when used in the context of the periods following the completion of this offering refer to Lehigh Gas Partners LP and its subsidiaries and, when used in the context of the periods prior to the completion of this offering, refer to that portion of the business of our predecessor, the wholesale distribution business of Lehigh Gas—Ohio, LLC and real property and leasehold interests that will be contributed to us by Joseph V. Topper, Jr., the Chief Executive Officer and the Chairman of the board of directors of our general partner, in connection with this offering as further described in "Summary—The Offering" and "Summary—The Transactions."

        References to "our general partner" or "Lehigh Gas GP" refer to Lehigh Gas GP LLC, the general partner of Lehigh Gas Partners LP and a wholly owned subsidiary of LGC. References to "LGO" refer to Lehigh Gas—Ohio, LLC, an entity managed by Joseph V. Topper, Jr, the Chief Executive Officer and the Chairman of the board of directors of our general partner. All of LGO's wholesale distribution business will be contributed to us in connection with this offering. References to the "Lehigh Gas Group" refer to the combined businesses of our predecessor and LGO before the completion of this offering. References to the "Topper Group" refer to Joseph V. Topper, Jr., collectively with those of his affiliates and family trusts that have ownership interests in our predecessor. The Topper Group has a controlling ownership interest in LGC, and John B. Reilly, III, a member of the board of directors of our general partner, has an interest in LGC. Together with LGC, the Topper Group will hold a majority of the limited partner interests in us. Through its controlling ownership interest in LGC, the Topper Group will have an indirect, controlling ownership interest in our general partner following completion of this offering.

        References to "lessee dealers" refer to third parties that operate sites that we own or lease and that we, in turn, lease such third-party sites to the lessee dealers; "independent dealers" refer to third parties that own their sites or lease their sites from a landlord other than us; and "sub-wholesalers" refer to third parties that elect to purchase motor fuels from us, on a wholesale basis, instead of purchasing directly from major integrated oil companies and refiners. We include a glossary of some of the terms used in this prospectus in Appendix B.


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SUMMARY

        This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the information that you should consider before investing in our common units. You should read the entire prospectus carefully, including the historical and pro forma financial statements and the notes to those financial statements included elsewhere in this prospectus. Unless indicated otherwise, the information presented in this prospectus assumes an initial public offering price of $20.00 per common unit (the midpoint of the price range set forth on the cover page of this prospectus) and that the underwriters do not exercise their option to purchase additional common units. You should read "Risk Factors" for information about important risks that you should consider before buying our common units. Market and industry data and other statistical data used throughout this prospectus are based on independent industry publications, government publications and other published independent sources. Please read "Industry" for additional information on these sources.

Lehigh Gas Partners LP

Overview

        We are a limited partnership formed to engage in the wholesale distribution of motor fuels, consisting of gasoline and diesel fuel, and to own and lease real estate used in the retail distribution of motor fuels. Since our predecessor was founded in 1992, we have generated revenues from the wholesale distribution of motor fuels to gas stations, truck stops and toll road plazas, which we refer to as "sites," and from real estate leases.

        Our primary business objective is to make quarterly cash distributions to our unitholders and, over time, to increase our quarterly cash distributions. Initially, we intend to make minimum quarterly distributions of $0.4375 per unit per quarter (or $1.75 per unit on an annualized basis), as further described in "Cash Distribution Policy and Restrictions on Distributions."

        We generate cash flows from the wholesale distribution of motor fuels primarily by charging a per gallon margin that is either a fixed mark-up per gallon or a variable rate mark-up per gallon. We will enter into a 15-year supply agreement with LGO for the wholesale distribution of motor fuels to its sites. Our supply agreements with lessee dealers generally have three-year terms, and our supply agreements with independent dealers generally have ten-year terms. By delivering motor fuels through independent carriers on the same day we purchase the motor fuels from suppliers, we seek to minimize the commodity risks typically associated with the purchase and sale of motor fuels.

        We generate cash flows from rental income primarily by collecting rent from lessee dealers and LGO pursuant to lease agreements. The lease agreements we have with lessee dealers had an average of 2.4 years remaining on the lease terms as of June 30, 2012. The lease agreements we have with LGO will each have a 15-year term. Our lease agreements with lessee dealers generally have three-year terms. We believe that consistent demand for motor fuels in the areas where we operate and the contractual nature of our rental income provide a stable source of cash flow.

        For the year ended December 31, 2011, we distributed an aggregate of approximately 562 million gallons of motor fuels to 575 sites. For the six months ended June 30, 2012, we distributed an aggregate of approximately 282 million gallons of motor fuels to 728 sites, including 120 sites to which we did not distribute motor fuels until we leased them from an affiliate of Getty in May 2012. Over half of the sites to which we distribute motor fuels are owned or leased by us. In addition, we have agreements requiring the operators of these sites to purchase motor fuels from us. For the year ended December 31, 2011, we were one of the ten

 

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largest independent distributors by volume in the United States for ExxonMobil, BP, Shell and Valero. We also distribute Sunoco and Gulf-branded motor fuels. Approximately 95% of the motor fuels we distributed in the year ended December 31, 2011 were branded.

        As of June 30, 2012, we distributed motor fuels to the following classes of business:

    229 sites operated by independent dealers;

    283 sites owned or leased by us that will be operated by LGO following the closing of this offering;

    149 sites owned or leased by us and operated by lessee dealers; and

    67 sites distributed through six sub-wholesalers.

        In May 2012, we entered into master lease agreements to lease an aggregate of 120 sites from an affiliate of Getty. Of the 120 sites, 74 are located in Massachusetts, 22 are located in New Hampshire, 15 are located in Pennsylvania and nine are located in Maine. Of these sites, seven are subleased to, and operated by, lessee dealers, 98 are company operated sites that will be subleased to, and operated by, LGO following this offering and 15 currently are closed. We are converting a significant portion of the sites that are subleased to and operated by LGO to lessee dealer-operated sites. We are evaluating alternatives to reopen or reposition the closed sites. We expect to distribute BP motor fuels to 88 sites and are evaluating branding alternatives for the other 32 sites.

        We are focused on owning and leasing sites primarily located in metropolitan and urban areas. We own and lease sites located in Pennsylvania, New Jersey, Ohio, New York, Massachusetts, Kentucky, New Hampshire and Maine. According to the Energy Information Administration, or the "EIA," of the eight states in which we own and lease sites, four are among the top ten consumers of gasoline in the United States and three are among the top ten consumers of on-highway diesel fuel in the United States. Over 85% of our sites are located in high-traffic metropolitan and urban areas. We believe that the limited availability of undeveloped real estate in these areas presents a high barrier to entry for new or existing retail gas station owners to develop competing sites.

        We have grown our business from 11 owned sites in 2004 to 182 owned sites, as of June 30, 2012. Our size and geographic concentration has enabled us to acquire multiple sites, particularly from major integrated oil companies and other entities that have been divesting assets associated with the motor fuel distribution business since the early 2000s. As a result of these acquisitions, we have increased our rental income and enhanced our wholesale distribution business. We have completed ten transactions in which we acquired ten or more sites per transaction, and we historically have been able to divest non-core sites that do not fit our strategic or geographic plans to other retail gas station operators or other entities, such as retail store operators, that may use the land for alternative purposes.

        The following table summarizes the aggregate number of sites that were owned or leased by the Lehigh Gas Group to which motor fuel was distributed by the wholesale distribution operations of the Lehigh Gas Group as of the periods presented and the number of sites owned or leased by us to which we would have distributed motor fuel as of the period presented had the transactions contemplated by this offering been completed as of the first day of the period presented. Please read "—The Transactions."

 

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  Lehigh Gas Group (1)    
  Lehigh Gas Partners LP
Pro Forma (2)
 
 
   
   
   
   
   
  Six Months
Ended
June 30,
 



   
   
 
 
  Year Ended December 31,    
  Six Months
Ended
June 30,
2012
 
 
  Year Ended
December 31,
2011
 
 
  2007   2008   2009   2010   2011   2011   2012    
 

Number of sites owned and leased (3):

                                                           

Owned

    157     169     254     221     227     213     221         181     182  

Leased

    62     82     99     143     143     154     263         130     250  
                                           

Total

    219     251     353     364     370     367     484         311     432  
                                           

(1)
The Lehigh Gas Group consists of the combined businesses of our predecessor and LGO.

(2)
The pro forma sites owned and leased for the year ended December 31, 2011 and six months ended June 30, 2012 do not reflect 59 and 52 sites, respectively, that are not being contributed to us in connection with this offering as those sites do not fit our strategic or geographic plans and are either held for sale by the Topper Group, are closed or were sold.

(3)
The year ended December 31, 2011, pro forma year ended December 31, 2011, six months ended June 30, 2012 and pro forma six months ended June 30, 2012 include four sites leased by the Topper Group, not included in our predecessor, that are being contributed to us in connection with this offering.

        The following table summarizes the aggregate volume of motor fuel distributed by the wholesale distribution operations of the Lehigh Gas Group for the periods presented and the volume of motor fuel we would have distributed had the transactions contemplated by this offering been completed as of the first day of the period presented.

 
  Lehigh Gas Group (1)    
  Lehigh Gas Partners LP
Pro Forma (2)
 
 
   
   
   
   
   
  Six Months
Ended
June 30,
 



   
   
 
 
  Year Ended December 31,    
  Six Months
Ended
June 30,
2012
 
 
  Year Ended
December 31,
2011
 
 
  2007   2008   2009   2010   2011   2011   2012    
 
 
   
   
   
   
   
  (in millions)
   
   
   
 

Gallons of motor fuel distributed to:

                                                           

Owned sites

    121.8     119.8     161.2     235.5     193.4     90.3     95.7         175.5     88.2  

Leased sites

    105.0     103.4     133.0     204.0     200.1     88.4     86.9         154.8     83.6  

Independent dealers

    106.3     96.1     123.2     156.1     167.6     94.3     75.1         167.9     79.3  

Sub-wholesalers (3)

    54.1     63.0     64.1     67.6     74.8     39.0     32.9         63.5     31.3  
                                           

Total

    387.2     382.3     481.5     663.2     635.9     312.0     290.6         561.7     282.4  
                                           

(1)
The Lehigh Gas Group consists of the combined businesses of our predecessor and LGO.

(2)
The pro forma gallons of motor fuel distributed for the year ended December 31, 2011 and six months ended June 30, 2012 do not reflect 74.2 million gallons and 8.2 million gallons, respectively, distributed to sites that are not being contributed to us in connection with this offering, as those sites do not fit our strategic or geographic plans and are either held for sale by the Topper Group or are closed. We will, however, continue to distribute motor fuels to these sites until they are disposed of by the Topper Group.

(3)
Includes motor fuel distributed to customers of the Lehigh Gas Group. We will distribute motor fuel to LGO on a sub-wholesale basis, and LGO will, in turn, sell the motor fuel at retail to customers following this offering.

 

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Our Business Strategy

        Our primary business objective is to make quarterly cash distributions to our unitholders and, over time, to increase our quarterly cash distributions by continuing to execute the following strategies:

    Own or lease sites in prime locations and seek to enhance the cash flow potential of these sites.  As of June 30, 2012, we owned or leased 378 sites that are strategically located in densely populated metropolitan and urban areas that historically have had high demand for motor fuel. These sites serve customers seeking convenient fueling locations on roads and intersections with heavy traffic. We continually evaluate opportunities to enhance the cash flow potential of our sites. For example, at our sites we may install car washes, convert service bays into convenience stores or upgrade convenience stores to quick service restaurants. These enhancements improve our ability to charge increased rents at these sites and increase the wholesale distribution potential of these sites.

    Expand within and beyond our core markets through acquisitions.  We intend to continue to grow our business through strategic and accretive acquisitions of sites and wholesale distribution businesses both within our existing area of operations and in new geographic areas. We believe that there is considerable opportunity for consolidation in our industry as the major integrated oil companies continue to divest sites they own and lease and as family-owned wholesale distributors consider selling their businesses. We have an established history of acquiring sites in Pennsylvania, New Jersey, Ohio, New York, Massachusetts and Kentucky. Please read "Business—Real Estate—Site Locations." Because of our interest in purchasing wholesale distribution operations as well as sites, we believe we have a competitive advantage over bidders interested in purchasing only sites.

    Serve as a preferred motor fuel distributor and provide dedicated supply and services to our customers.  We have established long-term relationships with our suppliers that enhance the dependability and quality of our motor fuel supply to our customers. During periods of motor fuel shortages, we historically have succeeded in sustaining a supply of motor fuel sufficient to meet the needs of our customers while many of our unbranded competitors have not. In addition, we provide our customers with services that enable them to more efficiently operate their gas stations, including, but not limited to, preferred pricing in purchasing gas station equipment and for providing maintenance services. We intend to continue to maintain our strong relationships with existing suppliers and customers and to develop new relationships to grow our wholesale distribution business.

    Increase our wholesale motor fuel distribution business by expanding market share.  As we seek to increase the number of sites we own and lease, we expect to have a commensurate increase in our wholesale distribution business due to the addition of these new sites. Furthermore, we believe that our standing in 2011 as a top ten independent distributor by volume in the United States for ExxonMobil, BP, Shell and Valero enables us to capitalize on the reduction by major integrated oil companies in the number of wholesalers with which they do business. As smaller wholesale distributors experience difficulties purchasing motor fuels from major integrated oil companies and refiners, we have been able to, and believe that we will be able to continue to, successfully target and sell motor fuels to these wholesalers on a sub-wholesaling basis.

 

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    Maintain strong relationships with major integrated oil companies and refiners.  Our relationships with suppliers of branded motor fuels are crucial to the operation and growth of our business. These relationships have allowed us to consistently negotiate supply agreements with competitive terms, and they have also provided us a source of acquisitions as major integrated oil companies and refiners have continued to divest retail distribution businesses and real estate. We intend to continue to maintain and grow our relationships with major integrated oil companies and refiners.

    Manage risk by outsourcing delivery of motor fuel, mitigating exposure to environmental liabilities and implementing systems and controls to manage operations.  Motor transportation services are not part of our core business, and we do not own or lease trucks for the delivery of motor fuel. This strategy alleviates the capital, labor, and liability constraints associated with operating a transportation fleet. Instead, we contract with third parties for the delivery of motor fuel. We believe that operating a fuel transportation service would not add significant economic or operational value to our business and that outsourcing the delivery service to third parties allows us to focus on our wholesale distribution business. Before acquiring the property underlying a site, we use a third-party environmental consultant to perform due diligence regarding the site to assess the exposure to risk of contamination, if any. Typically, when an acquired site requires remediation, either the seller funds an escrow account for the cost to remediate the property, or the seller retains the obligation to remediate the property. We may purchase environmental insurance policies to contain costs in the event that escrowed amounts are inadequate and/or if there are unknown pre-existing conditions. In addition, we participate in state programs, where available, that may also assist in funding the costs of environmental liabilities. Also, since we purchase and deliver fuel in the same day through independent carriers, we minimize commodity risks associated with the purchase and sale of motor fuels. In addition, our daily collection and settlement procedures minimize credit risk.

Our Competitive Strengths

        We believe the following competitive strengths will enable us to achieve our primary business objective:

    Stable cash flows from real estate rental income and wholesale motor fuel distribution.  We generate revenue from rent on our sites and earn a per gallon margin on the wholesale distribution of motor fuels. We collect rent from the lessee dealers and LGO pursuant to lease agreements. The average remaining lease term for our lessee dealer sites was 2.4 years as of June 30, 2012. The lease term for our LGO sites will be 15 years. We sell motor fuel on a wholesale basis to lessee dealers, independent dealers, LGO and sub-wholesalers. Our wholesale contracts prohibit customers from purchasing motor fuels from other distributors. We receive a per gallon margin that is either a fixed mark-up per gallon or a variable rate mark-up per gallon. We believe that the contractual nature of our rental income and the consistent demand for motor fuel in the areas where we operate provide a stable source of cash flow.

    Prime real estate locations in areas with high traffic and considerable motor fuel consumption.  We derive our rental income from sites we own or lease that provide convenient fueling locations in areas that are densely populated. Of the eight states in which we own and lease sites, four are among the top ten consumers of gasoline in the United States and three are among the top ten consumers of on-highway diesel fuel in

 

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      the United States. We believe that the limited availability of undeveloped real estate in these areas presents a high barrier to entry for the development of competing sites.

    Established history of acquiring sites and successfully integrating these sites and operations into our existing business.  We have an established history of acquiring sites to grow our business. We have increased the number of sites we own from 11 in 2004 to 182 as of June 30, 2012. Many of our acquisitions have been from major integrated oil companies that have pursued a strategy of divesting their retail marketing operations. Our strong industry relationships and ability to complete acquisitions have allowed us to find multiple sites and negotiate transactions that are on attractive terms. Furthermore, we have successfully integrated our acquisitions into our existing business by reducing overhead costs and realizing economies of scale associated with our wholesale distribution business.

    Long-term relationships with major integrated oil companies and refiners.  We have established long-term relationships and supply agreements with companies that are among the largest suppliers of branded motor fuel. For the year ended December 31, 2011, our wholesale business purchased approximately 44%, 26%, 21% and 4% of its motor fuel from ExxonMobil (a supplier of ours since 2002), BP (a supplier of ours since 2009), Shell (a supplier of ours since 2004) and Valero (a supplier of ours since 2003), respectively. Our prompt payment history and good credit standing with our suppliers allow us to receive certain term discounts on our fuel purchases, which increases the profitability of our wholesale distribution business. We believe that these relationships and payment terms are not easily replicated by new competitors in the markets we serve.

    Financial flexibility to pursue acquisitions and other expansion opportunities.  After the application of the net proceeds we receive from this offering, under our new credit agreement, which we will enter into at the closing of this offering, we will have $83.1 million available for either acquisitions or working capital purposes, depending on our needs, based on an assumed offering price of $20.00 per common unit (the midpoint of the price range set forth on the cover page of this prospectus). We believe that our borrowing capabilities available under our new credit agreement and our ability to issue additional common units will provide us with the financial flexibility to pursue acquisition and expansion opportunities.

    Extensive industry experience of our senior management team.  The members of our senior management team, including their experience managing the business and affairs of the Lehigh Gas Group, have, on average, over 24 years of experience in the ownership and operation of businesses that distribute motor fuel. In this regard, the members of our senior management team have an established history of acquiring sites and expanding our wholesale distribution business. Under their leadership, the Lehigh Gas Group grew from 11 owned sites in 2004 to 221 owned sites as of June 30, 2012. In addition, the Lehigh Gas Group distributed 387.2 million gallons of fuel in 2007 as compared to 635.9 million gallons in 2011. Furthermore, our senior management team has extensive relationships with the suppliers and customers that are crucial to the successful operation of our business.


Risk Factors

        An investment in our common units involves risks associated with our business, our partnership structure and the tax characteristics of our common units. Those risks are described under the caption "Risk Factors" beginning on page 24.

 

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Our Management

        We are managed and operated by the board of directors, executive officers and key members of management of our general partner and LGC. The board of directors of our general partner, including the independent directors, is chosen entirely by the Topper Group, as a result of its indirect controlling ownership interest of our general partner, and not by our unitholders. Unlike shareholders in a corporation, our unitholders will not be entitled to elect our general partner or its directors or otherwise participate directly in our management. For information about the executive officers and directors of our general partner, please read "Management—Directors, Executive Officers and Key Members of Management."

        Neither we nor our subsidiaries will have any employees. All of our operations will be conducted by personnel provided by LGC. At the closing of this offering, we and our general partner will enter into an omnibus agreement with LGC pursuant to which, among other things, LGC will provide management, administrative and operating services for us and our general partner. We will pay LGC a management fee, which shall initially be an amount equal to (1) $420,000 per month plus (2) $0.0025 for each gallon of motor fuel we distribute per month. In addition, we will reimburse LGC for all out-of-pocket third-party fees, costs, taxes and expenses incurred by LGC on our and our general partner's behalf in connection with providing the services required to be provided by LGC under the omnibus agreement. Also, employees of LGC will be eligible to receive awards under our long-term incentive plan. We will be responsible for all costs and expenses to maintain our long-term incentive plan and to satisfy any awards under such plan, including awards to employees of LGC and each director of our general partner who is not an officer or employee of LGC, our general partner or our subsidiaries. The board of directors of our general partner has preliminarily determined to grant up to 500,000 phantom units under our long-term incentive plan to employees of LGC, other than the Chief Executive Officer of our general partner, within 180 days after the closing of this offering. For a description of the phantom units, please read, "Management—Long-Term Incentive Plan—Phantom Units." Other than out-of-pocket third-party fees, costs, taxes and expenses and awards under our long-term incentive plan, LGC will be responsible for paying all costs and expenses, including, but not limited to compensation of its employees, incurred in connection with providing the services required to be provided by LGC under the omnibus agreement. Payments to LGC will be made monthly in arrears. We currently expect such payments to be, in the aggregate, approximately $6.6 million for the twelve months ending September 30, 2013. The management fee will be subject to an annual review and approval by the conflicts committee of the board of directors of our general partner. Please read "Certain Relationships and Related Party Transactions—Agreements with Affiliates—Omnibus Agreement."


Summary of Conflicts of Interest and Fiduciary Duties

        Our general partner has a legal duty to manage us in good faith. However, the executive officers and directors of our general partner also have fiduciary duties to manage our general partner in a manner beneficial to its owner, LGC. The officers and directors of LGC, in turn, have a fiduciary duty to manage LGC's business in a manner beneficial to its owners, including the Topper Group. LGC and the Topper Group each manage, own, and hold assets and investments in other entities that compete or may compete with us. Additionally, certain of our general partner's executive officers and directors will continue to have economic interests, investments and other economic incentives in LGC and the Topper Group. As a result of these relationships, conflicts of interest may arise in the future between us and our unitholders, on the one hand, and our general partner and its owner and affiliates, on the other hand.

        Our partnership agreement limits the liability and reduces the fiduciary duties owed by our general partner to our unitholders. Our partnership agreement also restricts the remedies

 

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available to unitholders for actions that might otherwise constitute breaches of our general partner's fiduciary duty. By purchasing a common unit, the purchaser agrees to be bound by the terms of our partnership agreement, and each unitholder is treated as having consented to various actions and potential conflicts of interest contemplated in the partnership agreement that might otherwise be considered a breach of fiduciary or other duties under Delaware law.

        We and our general partner will enter into an omnibus agreement with LGC pursuant to which, among other things, LGC will provide management, administrative and operating services for us and our general partner. We and our general partner will enter into lease agreements and a wholesale supply agreement with LGO pursuant to which LGO will lease sites from us and operate the retail motor fuel distribution business of our predecessor. LGO is managed by Joseph V. Topper, Jr., the Chief Executive Officer and the Chairman of the board of directors of our general partner. LGO is not prohibited from competing with us. Conflicts of interest may arise in the future between us and our unitholders, on the one hand, and LGO and our general partner, on the other hand.

        For a more detailed description of the conflicts of interest and fiduciary duties of our general partner, please read "Conflicts of Interest and Fiduciary Duties." For a description of other relationships with our affiliates, please read "Certain Relationships and Related Party Transactions."


Principal Executive Offices

        Our principal executive offices are located at 702 West Hamilton Street, Suite 203, Allentown, PA 18101, and our phone number is (610) 625-8000. Our website is located at http://www.lehighgaspartners.com. We expect to make our periodic reports and other information filed with or furnished to the Securities and Exchange Commission, or SEC, available, free of charge, through our website, as soon as reasonably practicable after those reports and other information are electronically filed with or furnished to the SEC. Information on our website or any other website is not incorporated by reference into this prospectus and does not constitute a part of this prospectus.


The Transactions

General

        We are a Delaware limited partnership recently formed to engage in the wholesale distribution of motor fuels and to own and lease real estate used in the retail distribution of motor fuels, which businesses have historically been conducted by our predecessor and LGO.

        At, or immediately prior to, the closing of this offering, the following transactions will occur:

    The Topper Group will (i) contribute to us certain entities, which we call the "contributed entities," or cause the contributed entities to merge with us and (ii) cause non-contributed entities to transfer to us certain (A) supply and distribution agreements, (B) real property and leasehold interests, (C) personal property and (D) other assets and liabilities relating to the motor fuel distribution business or the ownership of sites, in exchange for an aggregate of 1,525,000 common units and 5,052,000 subordinated units.

    LGC will contribute certain assets and liabilities to us in exchange for 2,473,000 subordinated units.

 

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    We will enter into a three-year $200 million senior secured revolving credit facility, which may be increased to $275 million if certain conditions are met, as described in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—New Credit Agreement."

    We will issue and sell 6,000,000 common units to the public representing an aggregate 39.9% limited partner interest in us. We expect to use the net proceeds as described in "Use of Proceeds," including a payment of $13.0 million to entities owned by adult children of Warren S. Kimber, Jr., a director of our general partner, as consideration for the cancellation of mandatorily redeemable preferred equity of our predecessor owned by these entities, a payment to these entities for accrued but unpaid dividends on the mandatorily redeemable preferred equity ($0.4 million as of September 30, 2012) and a distribution of an aggregate $20.0 million to the Topper Group and LGC as reimbursement for certain capital expenditures made by the Topper Group and LGC with respect to the assets they contributed and/or consideration for the purchase of all of the assets of one or more of the contributed entities.

    We will issue to our general partner the incentive distribution rights as described under "How We Make Distributions to Our Partners."

    We will enter into 15-year lease agreements pursuant to which LGO will lease sites from us on a fixed rent basis and a 15-year wholesale supply agreement pursuant to which LGO will operate the retail motor fuel distribution business of our predecessor and will be required to purchase motor fuel from us for the sites it will operate at market rate dealer tank wagon, or "DTW," prices.

    We and our general partner will enter into an omnibus agreement with LGC pursuant to which, among other things, LGC will provide us and our general partner with management, administrative and operating services. Please read "—Our Management."

        The board of directors of our general partner has preliminarily determined to grant up to 500,000 phantom units under our long-term incentive plan to employees of LGC, other than the Chief Executive Officer of our general partner, within 180 days after the closing of this offering. Please read "Management—Awards Under Our Long-Term Incentive Plan."


Organizational Structure

        We will conduct our operations through subsidiaries. In order to be treated as a partnership for federal income tax purposes, we must generate 90% or more of our gross income from certain qualifying sources, such as the wholesale distribution of motor fuel and the leasing of real property to unrelated parties. We currently plan to have Lehigh Gas Wholesale Services, Inc., a corporate subsidiary of ours, own and lease (or lease and then sub-lease) certain of our personal property and provide maintenance and other services to lessee dealers and other customers (including LGO). Income less deductible expenses from activities conducted by Lehigh Gas Wholesale Services, Inc. will be taxed at the applicable corporate income tax rate. However, dividends received by us from Lehigh Gas Wholesale Services, Inc. will constitute qualifying income. For a more complete description of this qualifying income requirement, please read "Material U.S. Federal Income Tax Consequences—Partnership Status."

 

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        The following summarizes our organizational structure after giving effect to this offering and the related transactions:

Public Common Units

    39.9 %

Topper Group Common Units

    10.1 %

Topper Group Subordinated Units

    33.6 %

LGC Subordinated Units

    16.4 %

Non-Economic General Partner Interest

    %(1)

Incentive Distribution Rights

    %(2)
       

    100.0 %
       

(1)
Our general partner owns a non-economic general partner interest in us. Please read "How We Make Distributions to Our Partners—General Partner Interest."

(2)
Incentive distribution rights represent a variable interest in distributions and thus are not expressed as a fixed percentage. See "How We Make Distributions to Our Partners—Incentive Distribution Rights." Distributions with respect to the incentive distribution rights will be classified as distributions with respect to equity interests.

        The board of directors of our general partner has preliminarily determined to grant up to 500,000 phantom units under our long-term incentive plan to employees of LGC, other than the Chief Executive Officer of our general partner, within 180 days after the closing of this offering. The table above does not reflect the 500,000 phantom units that are expected to be awarded under our long-term incentive plan. Please read "Management—Awards Under Our Long-Term Incentive Plan."

 

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GRAPHIC

 

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The Offering

Common units offered to
the public

  6,000,000 common units, or 6,900,000 common units if the underwriters exercise their option to purchase additional common units in full.

Units outstanding after
this offering

 

7,525,000 common units representing a 50.0% limited partner interest in us and 7,525,000 subordinated units representing a 50.0% limited partner interest in us.

 

If the underwriters do not exercise their option to purchase additional common units within the 30 day period following the date of this prospectus, we will issue 900,000 additional common units to the Topper Group at the expiration of the 30-day option period. If, and to the extent, the underwriters exercise their option to purchase additional common units, the number of common units purchased by the underwriters pursuant to such exercise will be sold to the public, and the remainder, if any, will be issued to the Topper Group. Accordingly, the exercise of the underwriters' option will not affect the total number of units outstanding or the amount of cash needed to pay the minimum quarterly distribution on all units.

Use of proceeds

 

We expect that the net proceeds from the sale of common units in this offering, after deducting the underwriting discounts, the structuring fee and estimated offering expenses payable by us, will be approximately $105.6 million based on an assumed offering price of $20.00 per common unit (the midpoint of the price range set forth on the cover page of this prospectus). We intend to use the estimated net proceeds from this offering:

 

to repay $57.9 million of indebtedness outstanding under the new credit facility, which will be drawn upon at the completion of this offering in order to repay in full our existing credit agreement;

 

to repay in full $14.3 million aggregate principal amount in outstanding mortgage notes;

 

to pay $13.0 million to entities owned by adult children of Warren S. Kimber, Jr., a director of our general partner, as consideration for the cancellation of mandatorily redeemable preferred equity of our predecessor owned by these entities and to pay these entities for accrued but unpaid dividends on the mandatorily redeemable preferred equity ($0.4 million as of September 30, 2012);

 

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to distribute an aggregate $20.0 million to the Topper Group and LGC as reimbursement for certain capital expenditures made by the Topper Group and LGC with respect to the assets they contributed, and/or consideration for the purchase of all of the assets of one or more of the contributed entities; and

 

to use for general partnership purposes, including working capital and acquisitions.

 

To the extent the underwriters exercise their option to purchase additional common units, an amount equal to the net proceeds from the issuance and sale of those common units will be distributed to the Topper Group. We expect that the net proceeds received from the exercise of the underwriters' option to purchase additional common units in full after deducting the underwriting discounts and the structuring fee will be $16.7 million based on an assumed offering price of $20.00 per common unit (the midpoint of the price range set forth on the cover page of this prospectus).

 

Please see "Use of Proceeds."

Cash distribution policy

 

In general, we expect that cash distributed for each quarter will equal cash generated from operations less cash needed for maintenance capital expenditures, accrued but unpaid expenses, including the management fee to LGC, reimbursement of expenses incurred by our general partner, debt service and other contractual obligations and reserves for future operating and capital needs or for future distributions to our partners. We expect that the board of directors of our general partner will reserve excess cash, from time to time, including during the forecast period, in an effort to sustain or permit gradual or consistent increases in quarterly distributions. The board of directors of our general partner may also determine to borrow to fund distributions in quarters when we generate less cash available for distribution than necessary to sustain or grow our cash distributions per unit.

 

Our initial cash distribution policy, established by our general partner, is to make minimum quarterly distributions in cash of at least $0.4375 (or $1.75 on an annualized basis) on each common unit and subordinated unit. Our ability to pay cash distributions at the minimum quarterly distribution rate is subject to various restrictions and other factors described in more detail under "Cash Distribution Policy and Restrictions on Distributions" and "Risk Factors."

 

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Although it is our intent to distribute each quarter an amount at least equal to the minimum quarterly distribution on all of our units, we are not obligated to make distributions in that amount or at all. However, with respect to any quarter during the subordination period, if we do not make quarterly distributions on our common units in an amount at least equal to the minimum quarterly distribution (plus any arrearages accumulated from prior periods), then the subordinated unitholders will not be entitled to receive any distributions until we have made distributions to common unitholders in an aggregate amount equal to the minimum quarterly distribution, plus all arrearages accumulated from prior periods. Please read "How We Make Distributions to Our Partners—Subordination Period."

 

For the first quarter that we are publicly traded, we will pay investors in this offering a prorated distribution covering the period from the closing date of this offering through December 31, 2012.

 

We will pay quarterly distributions, if any, each quarter in the following manner:

 

first, to the holders of common units, until each common unit has received a minimum quarterly distribution of $0.4375 plus any arrearages from prior quarters;

 

second, to the holders of subordinated units, until each subordinated unit has received a minimum quarterly distribution of $0.4375; and

 

third, to all unitholders, pro rata, until each unit has received a distribution of $0.5031.

 

If cash distributions to our unitholders exceed $0.5031 per unit in any quarter, our unitholders and our general partner, as holder of our incentive distribution rights, will receive distributions according to the following percentage allocations:

 

 
   
  Marginal Percentage
Interest in
Distributions
 
Total Quarterly Distribution
Target Amount
  Unitholders   General
Partner
 

above $0.5031 up to $0.5469

    85.0%     15.0%  

above $0.5469 up to $0.6563

    75.0%     25.0%  

above $0.6563

    50.0%     50.0%  

 

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  We refer to the additional increasing distributions to our general partner as "incentive distributions." The incentive distributions will be paid in cash. In certain circumstances, our general partner, or the subsequent holders of our incentive distribution rights, will have the right to reset the target distribution levels to higher levels based on our cash distributions at the time of the exercise of this reset election. Please read "How We Make Distributions to Our Partners—Incentive Distribution Rights."

 

In order to pay the minimum quarterly distribution for four quarters on our common units and subordinated units to be outstanding immediately after this offering, we will require approximately $26.3 million of cash available for distribution (or an average of approximately $6.6 million per quarter). On a pro forma basis, cash available for distribution generated during the year ended December 31, 2011 and the twelve months ended June 30, 2012 was approximately $32.3 million and $27.6 million, respectively, and, as such, we would have generated cash available for distribution sufficient to pay the minimum quarterly distribution on all of our common units and subordinated units for those periods. Please read "Cash Distribution Policy and Restrictions on Distributions—Unaudited Pro Forma Cash Available for Distribution."

 

We believe, based on our financial forecast and related assumptions included in "Cash Distribution Policy and Restrictions on Distributions—Estimated Cash Available for Distribution," that we will have sufficient cash available for distribution to pay the minimum quarterly distribution of $0.4375 on all of our units for each quarter in the twelve months ending September 30, 2013.

Subordinated units

 

The principal difference between our common and subordinated units is that in any quarter during the subordination period, the subordinated units will not be entitled to receive any distribution until the common units have received the minimum quarterly distribution plus any arrearages in the payment of the minimum quarterly distribution from prior quarters. Subordinated units will not accrue arrearages.

 

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Conversion of subordinated units

 

The subordination period will end on the first business day after we have earned and paid at least (1) $1.75 (the minimum quarterly distribution on an annualized basis) on each outstanding common unit and subordinated unit for each of three consecutive, non-overlapping four quarter periods ending on or after December 31, 2015 or (2) $2.6250 (150.0% of the annualized minimum quarterly distribution) on each outstanding common unit and subordinated unit and the related distribution on the incentive distribution rights for a four-quarter period ending on or after December 31, 2013, in each case provided there are no arrearages on our common units at that time. For the period after the closing of this offering through December 31, 2012, we will adjust the quarterly distribution based on the actual length of the period, and use such adjusted distribution in determining whether the test described in this paragraph has been satisfied for the quarter ending December 31, 2012.

 

The subordinated units of any holder will also convert into common units upon the removal of our general partner other than for cause if no units held by such holder or its affiliates are voted in favor of that removal.

 

When the subordination period ends, all subordinated units will convert into common units on a one-for-one basis, and all common units thereafter will no longer be entitled to arrearages. Please read "How We Make Distributions to Our Partners—Subordination Period."

Issuance of additional units

 

Our partnership agreement authorizes us to issue an unlimited number of additional units without the approval of our unitholders. Please read "Units Eligible for Future Sale" and "The Partnership Agreement—Issuance of Additional Securities."

 

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General partner's right to reset the target distribution levels

 

Our general partner, as the initial holder of our incentive distribution rights, has the right at any time when there are no subordinated units outstanding and it has received incentive distributions at the highest level to which it is entitled, 50.0%, for each of the prior four consecutive quarters, to reset the initial target distribution levels at higher levels based on our cash distributions at the time of the exercise of the reset election. If our general partner transfers all or a portion of our incentive distribution rights in the future, then the holder or holders of a majority of our incentive distribution rights will be entitled to exercise this right. The following assumes that our general partner holds all of the incentive distribution rights at the time that a reset election is made. Following a reset election, the minimum quarterly distribution will be adjusted to equal the reset minimum quarterly distribution, and the target distribution levels will be reset to correspondingly higher levels based on the same percentage increases above the reset minimum quarterly distribution.

 

If our general partner elects to reset the target distribution levels, it will be entitled to receive common units. The number of common units to be issued to our general partner will equal the number of common units which would have entitled the holder to an average aggregate quarterly cash distribution in the prior two quarters equal to the average of the distributions to our general partner on the incentive distribution rights in the prior two quarters. Please read "How We Make Distributions to Our Partners—General Partner's Right to Reset Incentive Distribution Levels."

Limited voting rights

 

Our general partner will manage and operate us. Unlike the holders of common stock in a corporation, our unitholders will have only limited voting rights on matters affecting our business. Our unitholders will have no right to elect our general partner or its directors on an annual or other continuing basis. Our general partner may not be removed except by a vote of the holders of at least 662/3% of the outstanding units, including any units owned by our general partner and its affiliates, voting together as a single class. Upon consummation of this offering, the Topper Group and LGC will own an aggregate of 60.1% of our common and subordinated units (or 54.2% if the underwriters exercise their option to purchase additional units in full). This will give the Topper Group and LGC the ability to prevent the removal of our general partner. Please read "The Partnership Agreement—Voting Rights."

 

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Call right

 

If at any time our general partner and its affiliates own more than 80% of the outstanding common units, our general partner has the right, but not the obligation, to purchase all of the remaining common units at a price equal to the greater of (1) the average of the daily closing price of the common units over the 20 trading days preceding the date three days before notice of exercise of the call right is first mailed and (2) the highest per-unit price paid by our general partner or any of its affiliates for common units during the 90-day period preceding the date such notice is first mailed. Please read "The Partnership Agreement—Call Right."

Estimated ratio of taxable income to distributions

 

We estimate that if you own the common units you purchase in this offering through the record date for distributions for the period ending December 31, 2015 you will be allocated, on a cumulative basis, an amount of federal taxable income for that period that will be 40% or less of the cash distributed to you with respect to that period. For example, if you receive an annual distribution of $1.75 per common unit, we estimate that your average allocable federal taxable income per year will be no more than $0.70 per common unit. Please read "Material U.S. Federal Income Tax Consequences—Tax Consequences of Unit Ownership—Ratio of Taxable Income to Distributions" for the basis of this estimate.

Material U.S. federal income tax consequences

 

For a discussion of other material U.S. federal income tax consequences that may be relevant to prospective unitholders who are individual citizens or residents of the United States, please read "Material U.S. Federal Income Tax Consequences."

Directed unit program

 

At our request, the underwriters have reserved up to 10% of the common units being offered by this prospectus (excluding the common units that may be issued upon the underwriters' exercise of their option to purchase additional common units) for sale at the initial public offering price to our directors, officers, employees, business associates and other related persons at the public offering price set forth on the cover page of this prospectus. For further information regarding our directed unit program, please read "Underwriting—Directed Unit Program."

Exchange listing

 

Our common units have been approved for listing on the New York Stock Exchange under the symbol "LGP."

 

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Summary Historical and Pro Forma Combined Financial and Operating Data

        The following table presents summary historical and pro forma combined financial and operating data of our predecessor, which includes the business of LGC and its subsidiaries and affiliates that will be contributed to us in connection with this offering, as of the dates and for the periods indicated.

        The summary combined financial data has been prepared on the following basis:

    the summary combined financial data presented as of December 31, 2009 is derived from the unaudited combined financial statements, which are not included in this prospectus;

    the summary combined financial data presented as of December 31, 2010 and 2011 and for the years ended December 31, 2009, 2010 and 2011 is derived from the audited combined financial statements, which are included elsewhere in this prospectus; and

    the summary combined financial data as of June 30, 2012 and for the six months ended June 30, 2011 and 2012 is derived from the unaudited condensed combined financial statements, which are included elsewhere in this prospectus.

        The summary pro forma combined financial data presented as of June 30, 2012, and for the year ended December 31, 2011 and the six months ended June 30, 2012 is derived from the unaudited pro forma condensed combined financial statements included elsewhere in this prospectus. Our unaudited pro forma condensed combined financial statements give pro forma effect to:

    (i) the contribution by the Topper Group to us of the contributed entities or the merger of the contributed entities with us and (ii) the transfer by the non-contributed entities to us of certain (A) supply and distribution agreements, (B) real property and leasehold interests, (C) personal property and (D) other assets and liabilities relating to the motor fuel distribution business or the ownership of sites, in exchange for an aggregate of 1,525,000 common units and 5,052,000 subordinated units;

    the contribution by LGC of certain assets and liabilities to us in exchange for 2,473,000 subordinated units;

    our entry into the new credit facility as described in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—New Credit Agreement;"

    the issuance by us to the public of 6,000,000 common units and the use of the net proceeds from this offering as described under "Use of Proceeds," including the distribution of an aggregate $20.0 million to the Topper Group and LGC as reimbursement for certain capital expenditures made by the Topper Group and LGC with respect to the assets they contributed and/or consideration for all of the assets of one or more of the contributed entities;

    our entry into lease agreements and a wholesale supply agreement with LGO as described in "Certain Relationships and Related Transactions—Agreements with Affiliates—LGO Lease Agreements" and "Certain Relationships and Related Transactions—Agreements with Affiliates—LGO Wholesale Supply Agreement;"

 

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    our entry into an omnibus agreement with LGC pursuant to which, among other things, LGC will provide us and our general partner with management, administrative and operating services and charge us a management fee, which shall initially be an amount equal to (1) $420,000 per month plus (2) $0.0025 per gallon of motor fuel we distribute per month. In addition, we will reimburse LGC for all out-of-pocket third-party fees, costs, taxes and expenses incurred by LGC on our behalf in connection with providing the services required to be provided by LGC under the omnibus agreement; and

    the exclusion of certain assets that are not being contributed to us in connection with this offering as they do not fit our strategic or geographic plans, retail motor fuel assets and operations, environmental indemnification assets and other miscellaneous assets that are not being contributed to us and environmental liabilities and other miscellaneous liabilities that will not be our responsibility.

        The unaudited pro forma condensed combined balance sheet data assumes the items listed above occurred as of June 30, 2012. The unaudited pro forma condensed combined statements of operations data assumes the items listed above occurred as of the beginning of the periods presented.

        For a detailed discussion of certain of the summary combined financial data contained in the following table, please read "Management's Discussion and Analysis of Financial Condition and Results of Operations." The following table should also be read in conjunction with "Use of Proceeds," "—The Transactions," the combined financial statements and related notes and our pro forma condensed combined financial statements and related notes included elsewhere in this prospectus. Among other things, the financial statements included elsewhere in this prospectus include more detailed information regarding the basis of presentation for the information in the following table.

 

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        The following table presents the non-GAAP financial measures, EBITDA and Adjusted EBITDA, which we use in our business as they are important supplemental measures of our performance and liquidity. We explain these measures under "—Non-GAAP Financial Measures" and reconcile them to net income and net cash provided by operating activities, their most directly comparable financial measures calculated and presented in accordance with GAAP below.

 
   
   
   
   
   
   
   
   
   
 
 
  Our Predecessor    
  Lehigh Gas Partners LP
Pro Forma
 
 
  Year Ended
December 31,
   
  Six Months
Ended June 30,
   
 
 
   
   
   
  Six Months
Ended
June 30,
2012
 
 
 


 


  Year Ended
December 31,
2011
 
 
  2009   2010   2011   2011   2012  
 
   
   
   
   
  (unaudited)
(in thousands)

   
  (unaudited)
 

Statement of Operations Data:

                                                   

Revenues:

                                                   

Revenues from fuel sales

  $ 490,261   $ 847,090   $ 1,242,040       $ 636,479   $ 546,911       $ 1,134,183   $ 535,493  

Revenues from fuel sales to affiliates

    310,794     329,974     365,106         139,538     318,408         659,488     303,690  

Rental income

    10,508     11,908     12,748         6,065     6,084         10,228     5,229  

Rental income from affiliates

    10,324     7,169     7,792         3,422     2,729         11,149     5,830  

Revenues from retail merchandise and other

    59     1,939     1,389         650     7         14     7  
                                       

Total revenues

    821,946     1,198,080     1,629,075         786,154     874,139         1,815,062     850,249  

Costs and Expenses:

                                                   

Cost of revenues from fuel sales

    472,359     820,959     1,209,719         621,402     534,226         1,107,153     522,868  

Cost of revenues from fuel sales to affiliates

    305,335     324,963     359,005         136,892     312,272         649,318     298,485  

Cost of revenues from retail merchandise and other

    7     1,774     1,068         494             2      

Rent expense

    4,494     6,422     9,402         4,521     4,862         7,259     4,331  

Operating expenses

    4,407     4,211     6,634         3,374     3,202         3,590     1,352  

Depreciation and amortization

    8,172     12,085     12,073         5,436     8,428         10,946     8,057  

Selling, general and administrative expense

    13,389     13,099     12,709         6,824     10,558         9,190     4,955  

(Gain) loss on sale of assets            

    (752 )   271     (3,188 )       (1,632 )   (2,973 )       (3,188 )   (2,973 )
                                       

Total costs and operating expenses

    807,411     1,183,784     1,607,422         777,311     870,575         1,784,270     837,075  
                                       

Operating income

    14,535     14,296     21,653         8,843     3,564         30,792     13,174  

Interest expense, net

    (10,453 )   (15,775 )   (12,140 )       (6,606 )   (6,893 )       (6,861 )   (4,207 )

Gain on extinguishment of debt

        1,200                              

Other income, net

    1,685     1,904     1,245         437     1,065         984     1,065  
                                       

Income (loss) from continuing operations

    5,767     1,625     10,758         2,674     (2,264 )       24,915     10,032  

Income tax expense from continuing operations

                                300     150  
                                       

Net income (loss) from continuing operations

    5,767     1,625     10,758         2,674     (2,264 )     $ 24,615   $ 9,882  
                                       

Income (loss) from discontinued operations

    311     (6,655 )   (848 )       (665 )   476                  
                                           

Net income (loss)

  $ 6,078   $ (5,030 ) $ 9,910       $ 2,009   $ (1,788 )                
                                           

 

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  Our Predecessor    
  Lehigh Gas Partners LP
Pro Forma
 
 
  Year Ended
December 31,
   
  Six Months
Ended June 30,
   
 
 
   
   
   
  Six Months
Ended
June 30,
2012
 
 
 


 


  Year Ended
December 31,
2011
 
 
  2009   2010   2011   2011   2012  
 
   
   
   
   
  (unaudited)
   
  (unaudited)
 
 
  (dollars in thousands, except margin per gallon)
 

Cash Flow Data:

                                                   

Net cash provided by (used in):

                                                   

Operating activities

  $ 23,673   $ 30,892   $ 11,560       $ 8,056   $ 12,699                  

Investing activities

    (62,234 )   14,518     (18,875 )       (10,592 )   1,508                  

Financing activities

    36,161     (42,743 )   6,409         519     (14,274 )                

Other Financial Data:

                                                   

EBITDA

  $ 27,850   $ 26,909   $ 34,420       $ 14,441   $ 13,618       $ 42,722   $ 22,296  

Adjusted EBITDA

  $ 27,098   $ 27,180   $ 31,232       $ 12,809   $ 10,645       $ 39,534   $ 19,323  

Capital expenditures

                                                   

Maintenance

    (1,516 )   (2,401 )   (2,772 )       (1,377 )   (805 )       (2,772 )   (3,500 )

Expansion

    (70,217 )   (2,126 )   (33,749 )       (15,568 )   (500 )       (33,749 )    

Operating Data:

                                                   

Sites owned and leased

    320     332     368         365     482         311     432  

Gallons of motor fuel distributed (in millions) (1)

    437.7     518.9     532.2         258.3     289.0         561.7     282.4  

Margin per gallon (2)

  $ 0.0534   $ 0.0600   $ 0.0722       $ 0.0686   $ 0.0651       $ 0.0662   $ 0.0631  

 
  Our Predecessor    
   
 
 
  As of
December 31,
   
   
   
  Lehigh Gas
Partners LP
Pro Forma
As of
June 30,
2012
 
 
   
   
   
 
 
  2009  


  2010   2011  


  As of June 30,
2012
 


 
 
  (unaudited)
   
   
   
   
  (unaudited)
   
  (unaudited)
 
 
  (in thousands)
 

Balance Sheet Data:

                                           

Property and equipment, net

  $ 229,779       $ 185,579   $ 202,393       $ 220,368       $ 196,693  

Total assets

    293,641         257,415     269,628         300,743         226,875  

Long-term debt

    250,843         194,774     229,955         242,765         168,496  

Total liabilities

    314,933         285,593     302,315         337,183         209,033  

Owners' equity (deficit)

    (21,292 )       (28,178 )   (32,687 )       (36,440 )       17,842  

(1)
Excludes gallons of motor fuel distributed to sites classified as discontinued operations with respect to the periods presented for our predecessor.

(2)
Margin per gallon represents (a) total revenues from fuel sales, less total cost of revenues from fuel sales, divided by (b) total gallons of motor fuels distributed.

Non-GAAP Financial Measures

        We use the non-GAAP financial measures, EBITDA and Adjusted EBITDA, in this prospectus. EBITDA represents net income before deducting interest expense, income taxes and depreciation and amortization. Adjusted EBITDA represents EBITDA as further adjusted to exclude the gain or loss on sale of assets. EBITDA and Adjusted EBITDA are used as a supplemental financial measures by management and by external users of our financial statements, such as investors and lenders, to assess:

    our financial performance without regard to financing methods, capital structure or income taxes;

    our ability to generate cash sufficient to make distributions to our unitholders; and

    our ability to incur and service debt and to fund capital expenditures.

        In addition, Adjusted EBITDA is used as a supplemental financial measure by management and these external users of our financial statements to assess the operating performance of our business on a consistent basis by excluding the impact of sales of our assets, which do not result directly from our wholesale distribution of motor fuel and our leasing of real property.

 

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        EBITDA and Adjusted EBITDA should not be considered alternatives to net income, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. EBITDA and Adjusted EBITDA exclude some, but not all, items that affect net income and these measures may vary among other companies.

        EBITDA and Adjusted EBITDA as presented below may not be comparable to similarly titled measures of other companies. The following table presents reconciliations of EBITDA and Adjusted EBITDA to net income and EBITDA and Adjusted EBITDA to net cash provided by operating activities, the most directly comparable GAAP financial measures, on a historical basis and pro forma basis, as applicable, for each of the periods indicated.

 
  Our Predecessor    
   
   
 
 
   
  Lehigh Gas Partners LP
Pro Forma
 
 
   
   
   
   
  Six Months
Ended June 30,
   
 
 
  Year Ended
December 31,
   
   
 
 
   
   
   
  Six Months
Ended
June 30,
2012
 
 
 


   
   
 


  Year Ended
December 31,
2011
 
 
  2009   2010   2011   2011   2012  
 
   
   
   
   
  (unaudited)
   
  (unaudited)
 
 
   
   
   
   
  (in thousands)
   
   
   
 

Reconciliation of EBITDA and Adjusted EBITDA to net income (loss) (1):

                                                   

Net income (loss) from continuing operations

  $ 5,767   $ 1,625   $ 10,758       $ 2,674   $ (2,264 )     $ 24,615   $ 9,882  

Income (loss) from discontinued operations

    311     (6,655 )   (848 )       (665 )   476                  
                                           

Net income (loss)

  $ 6,078   $ (5,030 ) $ 9,910       $ 2,009   $ (1,788 )                

Plus:

                                                   

Depreciation and amortization

    9,664     13,540     12,153         5,581     8,486         10,946     8,057  

Income tax

                                300     150  

Interest expense, net

    12,108     18,399     12,357         6,851     6,920         6,861     4,207  
                                       

EBITDA

  $ 27,850   $ 26,909   $ 34,420       $ 14,441   $ 13,618       $ 42,722   $ 22,296  

(Gain) loss on sale of assets

    (752 )   271     (3,188 )       (1,632 )   (2,973 )       (3,188 )   (2,973 )
                                       

Adjusted EBITDA

  $ 27,098   $ 27,180   $ 31,232       $ 12,809   $ 10,645       $ 39,534   $ 19,323  
                                       

Reconciliation of EBITDA and Adjusted EBITDA to net cash provided by operating activities:

                                                   

Net cash provided by operating activities

  $ 23,673   $ 30,892   $ 11,560       $ 8,056   $ 12,699                  

Changes in assets and liabilities

    (9,913 )   (13,003 )   7,662         (718 )   (8,013 )                

Interest expense, net

    12,108     18,399     12,357         6,851     6,920                  

Other

    1,982     (9,379 )   2,841         252     2,012                  
                                           

EBITDA

  $ 27,850   $ 26,909   $ 34,420       $ 14,441   $ 13,618                  

(Gain) loss on sale of assets

    (752 )   271     (3,188 )       (1,632 )   (2,973 )                
                                           

Adjusted EBITDA

  $ 27,098   $ 27,180   $ 31,232       $ 12,809   $ 10,645                  
                                           

(1)
Lehigh Gas Partners LP did not report net income (loss) on a pro forma basis for the year ended December 31, 2011 or the six months ended June 30, 2012. Accordingly, EBITDA and Adjusted EBITDA are reconciled to net income (loss) from continuing operations for the periods presented on a pro forma basis.

 

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RISK FACTORS

        Limited partner interests are inherently different from the capital stock of a corporation, although many of the business risks to which we are subject are similar to those that would be faced by a corporation engaged in a similar business. You should carefully consider the following risk factors together with all of the other information included in this prospectus in evaluating an investment in our common units.

        If any of the following risks were actually to occur, our business, financial condition, and/or results of operations could be materially adversely affected. In that case, we might not be able to pay distributions on our common units, the trading price of our common units could decline, and you could lose all or part of your investment.

Risks Inherent in Our Business

         We may not have sufficient cash from operations to enable us to pay the minimum quarterly distribution following establishment of cash reserves and payment of fees and expenses, including payments to our general partner.

        We may not have sufficient cash each quarter to pay the minimum quarterly distribution. The minimum quarterly distribution is an amount that must be paid to holders of our common units, including any arrearages, before any distributions may be made to holders of our subordinated units, to the extent that any distributions are made. Please read "Cash Distribution Policy and Restrictions on Distributions—Minimum Quarterly Distribution."

        The amount of cash we can distribute on our units principally depends upon the amount of cash we generate from our operations, which will fluctuate from quarter to quarter based on, among other things:

    the industries in which we operate are subject to seasonal trends, which may cause our operating costs to fluctuate, affecting our earnings;

    severe storms could adversely affect our business by damaging our suppliers' operations or lowering our sales volumes;

    competition from other companies that sell motor fuel products in our targeted market areas;

    the inability to identify and acquire suitable sites or to negotiate acceptable leases for such sites;

    demand for motor fuel products in the markets we serve and the margin per gallon we earn distributing motor fuel;

    the potential inability to obtain adequate financing to fund our expansion;

    the level of our operating costs, including payments to LGC; and

    prevailing economic conditions.

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        In addition, the actual amount of cash we will have available for distribution will depend on other factors such as:

    the level of capital expenditures we make;

    the restrictions contained in our credit agreements;

    our debt service requirements;

    the cost of acquisitions;

    fluctuations in our working capital needs;

    our ability to borrow under our credit agreements to make distributions to our unitholders; and

    the amount, if any, of cash reserves established by our general partner in its discretion.

        You should be aware that we do not have a legal obligation to pay quarterly distributions at our minimum quarterly distribution rate or at any other rate. There is no guarantee that we will distribute quarterly cash distributions to our unitholders in any quarter. For a description of additional restrictions and factors that may affect our ability to pay cash distributions, see "Cash Distribution Policy and Restrictions on Distributions."

         The assumptions underlying the forecast of cash available for distribution that we include in "Cash Distribution Policy and Restrictions on Distributions" are inherently uncertain and subject to significant business, economic, financial, regulatory and competitive risks and uncertainties that could cause our actual cash available for distribution to differ materially from our forecast.

        The forecast of cash available for distribution set forth in "Cash Distribution Policy and Restrictions on Distributions" includes our forecast of our results of operations and cash available for distribution for the twelve months ending September 30, 2013, which we sometimes refer to as the "forecast period." Our ability to pay the full minimum quarterly distribution in the forecast period is based on a number of assumptions that may not prove to be correct and that are discussed in "Cash Distribution Policy and Restrictions on Distributions." Our financial forecast has been prepared by management and we have neither received nor requested an opinion or report on it from our or any other independent auditor. The assumptions underlying the forecast are inherently uncertain and are subject to significant business, economic, financial, regulatory and competitive risks and uncertainties, including those discussed in this prospectus, which could cause our results to be materially less than the amount estimated. If we do not achieve the forecasted results, we may not be able to make the minimum quarterly distribution or pay any amount on our common units, and the market price of our common units may decline materially.

         The amount of cash we have available for distribution to unitholders depends primarily on our cash flow rather than on our profitability, which may prevent us from making cash distributions, even during periods when we record net income.

        The amount of cash we have available for distribution depends primarily on our cash flow, and not solely on profitability, which will be affected by non-cash items. As a result, we may make cash distributions during periods when we record losses for financial accounting purposes

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and may not make cash distributions during periods when we record net income for financial accounting purposes.

         The industries in which we operate are subject to seasonal trends, which may cause our sales and/or operating costs to fluctuate, affecting our earnings and ability to make distributions.

        We experience more demand for motor fuel during the late spring and summer months than during the fall and winter. Travel, recreational activities and construction are typically higher in these months in the geographic areas in which we operate, increasing the demand for motor fuel that we distribute. Therefore, our revenues are typically higher in the second and third quarters of our fiscal year. As a result, our results from operations may vary widely from period to period, affecting our earnings. With lower cash flow during the first and fourth calendar quarters, we may be required to borrow money in order to pay the minimum quarterly distribution to our unitholders. Any restrictions on our ability to borrow money could restrict our ability to pay the minimum quarterly distribution to our unitholders.

         Decreases in consumer spending, travel and tourism in the areas we serve could adversely impact our wholesale distribution business.

        In the retail motor fuel and convenience store industries, customer traffic is generally driven by consumer preferences and spending trends, growth rates for automobile and commercial truck traffic and trends in travel, tourism and weather. Changes in economic conditions generally or in our targeted markets specifically could adversely impact consumer spending patterns and travel and tourism in our markets, which could have a material adverse effect on business, results of operations and our ability to make distributions.

         Our business, financial condition, results of operations and ability to make quarterly distributions to our unitholders are influenced by changes in demand for, changes in the prices of motor fuels, which could adversely affect our margins and our customers' financial condition, contract performance and trade credit.

        Financial and operating results from our wholesale distribution operations are influenced by price volatility and demand for motor fuels. When prices for motor fuels rise, some of our customers may have insufficient credit to purchase supply from us at their historical purchase volumes, and their customers, in turn, may reduce consumption, thereby reducing demand for product.

        Furthermore, when prices are increasing, we may be unable to fully pass our additional costs to our customers, resulting in lower margins for us which could adversely affect our results of operations.

         The wholesale motor fuel distribution industry is characterized by intense competition and fragmentation and our failure to effectively compete could have a material adverse effect on our business, results of operations and ability to make distributions.

        The market for distribution of wholesale motor fuel is highly competitive and fragmented, which results in narrow margins. We have numerous competitors, some of which may have significantly greater resources and name recognition than we do. We rely on our ability to provide value added reliable services and to control our operating costs in order to maintain our margins and competitive position. If we were to fail to maintain the quality of our services, customers could choose alternative distribution sources and our margins could decrease. Furthermore, there can be no assurance that major integrated oil companies will not decide to

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distribute their own products in direct competition with us or that large customers will not attempt to buy directly from the major integrated oil companies. The occurrence of any of these events could have a material adverse effect on our business, results of operations and our ability to make distributions.

         We are exposed to risks of loss in the event of nonperformance by our customers and suppliers.

        A tightening of credit in the financial markets or an increase in interest rates may make it more difficult for customers and suppliers to obtain financing and, depending on the degree to which it occurs, there may be a material increase in the nonpayment or other nonperformance by our customers and suppliers. Even if our credit review and analysis mechanisms work properly, we may experience financial losses in our dealings with these third parties. A material increase in the nonpayment or other nonperformance by our customers and/or suppliers could adversely affect our business, financial condition, results of operations and ability to make quarterly distributions to our unitholders.

         Historical prices for motor fuel have been volatile and significant changes in such prices in the future may adversely affect our business, results of operations and ability to make distributions.

        Crude oil and domestic wholesale motor fuel markets are volatile. General political conditions, acts of war or terrorism and instability in oil producing regions, particularly in the Middle East, Russia, Africa and South America, could significantly impact crude oil supplies and wholesale motor fuel costs. Significant increases and volatility in wholesale motor fuel costs could result in significant increases in the retail price of motor fuel products and in lower margin per gallon. Increases in the retail price of motor fuel products could impact consumer demand for motor fuel. This volatility makes it extremely difficult to predict the impact future wholesale cost fluctuations will have on our operating results and financial condition. Dramatic increases in crude oil prices squeeze fuel margins because fuel costs typically increase faster than we are able to pass along the increases to customers. Higher fuel prices trigger higher credit card expenses, because credit card fees are calculated as a percentage of the transaction amount, not as a percentage of gallons sold. A significant change in any of these factors could materially impact our customer's motor fuel gallon volumes, gross profit and overall customer traffic, which in turn could have a material adverse effect on our business, results of operations and ability to make distributions.

         Energy efficiency and new technology may reduce the demand for our motor fuel and adversely affect our operating results.

        Increased conservation and technological advances, including the development of improved gas mileage vehicles and the increased usage of electrically powered cars have adversely affected the demand for motor fuel. Future conservation measures or technological advances in fuel efficiency might reduce demand and adversely affect our operating results.

         We depend on four principal suppliers for the majority of our motor fuel. A disruption in supply or a change in our relationship with any one of them could have a material adverse effect on our business, results of operations and cash available for distribution.

        ExxonMobil, BP, Shell and Valero collectively supplied 95%, of our motor fuel purchases in fiscal 2011. For the year ended December 31, 2011, our wholesale business purchased approximately 44%, 26%, 21% and 4% of its motor fuel from ExxonMobil (a supplier of ours since 2002), BP (a supplier of ours since 2009), Shell (a supplier of ours since 2004) and Valero

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(a supplier of ours since 2003), respectively. A change of motor fuel suppliers, a disruption in supply or a significant change in our pricing with ExxonMobil, BP, Shell and Valero could have a material adverse effect on our business, results of operations and cash available for distribution.

         Due to our lack of geographic diversification, adverse developments in our operating areas would adversely affect our results of operations and cash available for distribution to our unitholders.

        Substantially all of our operations are located in the northeastern United States and in Ohio. Due to our lack of geographic diversification, an adverse development in the businesses or areas in which we operate, including adverse developments due to catastrophic events or weather and decreases in demand for motor fuel, could have a significantly greater impact on our results of operations and cash available for distribution to our unitholders than if we operated in more diverse locations.

         We rely on our suppliers to provide trade credit terms to adequately fund our on-going operations.

        Our business is impacted by the availability of trade credit to fund motor fuel purchases. An actual or perceived downgrade in our liquidity or operations could cause our suppliers to seek credit support in the form of additional collateral, limit the extension of trade credit, or otherwise materially modify their payment terms. Any material changes in the payments terms, including payment discounts, or availability of trade credit provided by our principal suppliers could impact our liquidity, results of operations and cash available for distribution to our unitholders.

         If we do not make acquisitions on economically acceptable terms, our future growth may be limited.

        Our ability to grow substantially depends on our ability to make acquisitions that result in an increase in operating surplus per unit. We may be unable to make such accretive acquisitions for any of the following reasons:

    we are unable to identify attractive acquisition candidates or negotiate acceptable purchase contracts for them;

    we are unable to raise financing for such acquisitions on economically acceptable terms; or

    we are outbid by competitors.

        In addition, we may consummate acquisitions, which at the time of consummation we believe will be accretive, but which ultimately may not be accretive. If any of these events occurred, our future growth would be limited.

         Severe weather could adversely affect our business by damaging our facilities or our suppliers' operations or customers.

        Severe weather could damage our facilities or our suppliers' operations or customers and could have a significant impact on consumer behavior, travel and convenience store traffic patterns. This could have a material adverse effect on our business, results of operations and ability to make our distributions.

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         Our success and future growth depends in part on our ability to purchase or lease additional sites. Our acquisition strategy involves risks that may adversely affect our business.

        Any acquisition involves potential risks, including:

    the inability to identify and acquire suitable sites or to negotiate acceptable leases or subleases for such sites;

    difficulties in adapting our distribution and other operational and management systems to an expanded network of sites;

    performance from the acquired assets and businesses that is below the forecasts we used in evaluating the acquisition;

    a significant increase in our indebtedness and working capital requirements;

    the inability to timely and effectively integrate the operations of recently acquired businesses or assets, particularly those in new geographic areas or in new lines of business;

    the incurrence of substantial unforeseen environmental and other liabilities arising out of the acquired businesses or assets, including liabilities arising from the operation of the acquired businesses or assets prior to our acquisition, for which we are not indemnified or for which the indemnity is inadequate;

    competition in our targeted market areas;

    customer or key employee loss from the acquired businesses; and

    diversion of our management's attention from other business concerns.

        Any of these factors could adversely affect our ability to achieve anticipated levels of cash flows from our acquisitions and realize other anticipated benefits.

         Our debt levels may limit our flexibility in obtaining additional financing and in pursuing other business opportunities.

        We have a significant amount of debt. After giving effect to this offering and the related transactions, we estimate that our pro forma total debt (inclusive of financing obligations) as of June 30, 2012 would have been approximately $168.9 million. Following this offering, we will continue to have the ability to incur debt, including the capacity to borrow up to $200 million, which limit may be increased to $275 million if certain conditions are met, under our new credit agreement, subject to any limitations set forth in the new credit agreement. Our level of indebtedness could have important consequences to us, including the following:

    our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired or such financing may not be available on favorable terms;

    covenants contained in our new credit agreement will require us to meet financial tests that may affect our flexibility in planning for and reacting to changes in our business, including possible acquisition opportunities;

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    we will need a substantial portion of our cash flow to make interest payments on our indebtedness, reducing the funds that would otherwise be available for operations, future business opportunities and distributions to unitholders;

    our debt level will make us more vulnerable than our competitors with less debt to competitive pressures or a downturn in our business or the economy generally; and

    our debt level may limit our flexibility in responding to changing business and economic conditions.

        Our ability to service our indebtedness will depend upon, among other things, our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, some of which are beyond our control. If our operating results are not sufficient to service our current or future indebtedness, we will be forced to take actions, such as reducing distributions, reducing or delaying our business activities, acquisitions, investments and/or capital expenditures, selling assets, restructuring or refinancing our indebtedness, or seeking additional equity capital or bankruptcy protection. We may not be able to effect any of these actions on satisfactory terms, or at all.

         Our new credit agreement will contain operating and financial restrictions that may limit our business and financing activities.

        The operating and financial restrictions and covenants in our new credit agreement and any future financing agreements could adversely affect our ability to finance future operations or capital needs or to engage, expand or pursue our business activities. For example, our new credit agreement will restrict our ability to:

    make distributions if any potential default or event of default occurs;

    incur additional indebtedness or guarantee other indebtedness;

    grant liens or make certain negative pledges;

    make certain loans or investments;

    make any material change to the nature of our business, including mergers, consolidations, liquidations and dissolutions;

    make capital expenditures in excess of specified levels;

    acquire another company; or

    enter into a sale-leaseback transaction or sale of assets.

        Our ability to comply with the covenants and restrictions contained in our new credit agreement may be affected by events beyond our control, including prevailing economic, financial and industry conditions. If market or other economic conditions deteriorate, our ability to comply with these covenants may be impaired. If we violate any of the restrictions, covenants, ratios or tests in our new credit agreement, the debt issued under the new credit agreement may become immediately due and payable, and our lenders' commitment to make further loans to us may terminate. We might not have, or be able to obtain, sufficient funds to make these accelerated payments. In addition, our obligations under our new credit agreement will be

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secured by substantially all of our assets, and if we are unable to repay our indebtedness under our new credit agreement, the lenders could seek to foreclose on such assets.

         We required waivers from our lenders to maintain compliance with the covenants under our existing credit agreement in the past, and there is no assurance that we will be able to comply with the covenants, or to obtain waivers of non-compliance, under our new credit facility in the future.

        We were not in compliance with certain financial covenants under our existing credit facility as of December 31, 2011 and June 30, 2012, and subsequent amendments to our existing credit agreement waived our non-compliance. In connection with this offering, the term loan under our existing credit agreement will be terminated and the existing credit facility will be paid off in connection with our entry into the new credit agreement. We cannot assure you that, if we fail to comply with the financial covenants under our new credit agreement, our lenders will agree to waive any non-compliance. Any default under our new credit facility could have a material adverse effect on our liquidity position or otherwise adversely affect our financial condition and results of operations. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—New Credit Agreement."

         Our inability to successfully integrate acquired sites and businesses could adversely affect our business.

        Acquiring sites and businesses involve risks that could cause our actual growth or operating results to differ adversely compared to expectations. For example:

    we may not be able to obtain the necessary financing on favorable terms, or at all, to finance any of our potential acquisitions;

    we may fail or be unable to discover some of the liabilities of businesses that we acquire. These liabilities may result from a prior owner's noncompliance with applicable federal, state or local laws;

    we may fail to successfully integrate or manage acquired sites;

    we may divert the attention of our senior management from focusing on our core business by focusing on acquisitions;

    we may not be able to obtain the cost savings and financial improvements we anticipate or acquired properties may not perform as we expect; and

    we face the risk that our existing financial controls, information systems, management resources and human resources will need to grow to support future growth.

         We may not be able to lease sites we own or sub-lease sites we lease on favorable terms and any such failure could adversely affect our results of operations and cash available for distribution to our unitholders.

        We may lease and/or sub-lease certain sites to lessee dealers or to LGO where the rent expense is more than the lease payments. If we are unable to obtain tenants on favorable terms for sites we own or lease, the lease payments we receive may not be adequate to cover our rent expense for leased sites and may not be adequate to ensure that we meet our debt service requirements. We cannot provide any assurance that the margins on our wholesale distribution of motor fuels to these sites will be adequate to off-set unfavorable lease terms. The occurrence

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of these events could adversely affect our results of operations and cash available for distribution to our unitholders.

         The operations at sites we own or lease are subject to inherent risk, operational hazards and unforeseen interruptions and insurance may not adequately cover any such exposure. The occurrence of a significant event or release that is not fully insured could have a material adverse effect on our business, results of operations and cash available for distribution.

        The presence of flammable and combustible products at our sites provides the potential for fires and explosions that could destroy both property and human life. Furthermore, our operations are subject to unforeseen interruptions such as natural disasters, adverse weather and other events beyond our control. Motor fuels also have the potential to cause environmental damage if improperly handled or released. If any of these events were to occur, we could incur substantial losses and/or curtailment of related operations because of personal injury or loss of life, severe damage to and destruction of property and equipment, and pollution or other environmental damage.

        We are not fully insured against all risks incident to our business. We may be unable to maintain or obtain insurance of the type and amount we desire at reasonable rates. As a result of market conditions, premiums and deductibles for certain of our insurance policies have increased and could escalate further. In some instances, certain insurance could become unavailable or available only for reduced amounts of coverage. If we were to incur a significant liability for which we were not fully insured, it could have a material adverse effect on our financial position and ability to make distributions to unitholders.

         We are relying on LGC to indemnify us for any costs or expenses that we incur for environmental liabilities and third-party claims, regardless of when a claim is made, that are based on environmental conditions in existence prior to the closing of this offering at our predecessor's sites. To the extent escrow accounts, insurance and/or payments from LGC are not sufficient to cover any such costs or expenses, our business, liquidity and results of operations could be adversely affected.

        The omnibus agreement provides that LGC must indemnify us for any costs or expenses that we incur for environmental liabilities and third-party claims, regardless of when a claim is made, that are based on environmental conditions in existence prior to the closing of this offering at our predecessor's sites. LGC is the beneficiary of escrow accounts created to cover the cost to remediate certain environmental liabilities. In addition, LGC maintains insurance policies to cover environmental liabilities and/or, where available, participates in state programs that may also assist in funding the costs of environmental liabilities. There are certain sites to be acquired by us in the transactions contemplated by this offering with existing environmental liabilities that are not covered by escrow accounts or insurance policies. As of June 30, 2012, LGC had an aggregate of approximately $3.1 million of environmental liabilities on sites to be acquired by us in the transactions contemplated by this offering that are not covered by escrow accounts or insurance policies. To the extent escrow accounts, insurance and/or payments from LGC are not sufficient to cover any such costs or expenses, our business, liquidity and results of operations could be adversely affected. Please read, "Certain Relationships and Related Party Transactions—Agreements with Affiliates—Omnibus Agreement."

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         Our motor fuel sales are generated under contracts that must be renegotiated or replaced periodically. If we are unable to successfully renegotiate or replace these contracts, then our results of operations and financial condition could be adversely affected.

        Our motor fuel sales are generated under contracts that must be periodically renegotiated or replaced. As these contracts expire, they must be renegotiated or replaced. We may be unable to renegotiate or replace these contracts when they expire, and the terms of any renegotiated contracts may not be as favorable as the contracts they replace. Whether these contracts are successfully renegotiated or replaced is often times subject to factors beyond our control. Such factors include fluctuations in motor fuel prices, counterparty ability to pay for or accept the contracted volumes and a competitive marketplace for the services offered by us. If we cannot successfully renegotiate or replace our contracts or must renegotiate or replace them on less favorable terms, sales from these arrangements could decline and our ability to make distributions to our unitholders could be adversely affected.

         We are subject to federal, state and local laws and regulations that govern the product quality specifications of the motor fuel that we distribute.

        Various federal, state, and local agencies have the authority to prescribe specific product quality specifications to the sale of commodities. Our business includes such commodities. Changes in product quality specifications, such as reduced sulfur content in refined petroleum products, or other more stringent requirements for fuels, could reduce our ability to procure product and our sales volume, require us to incur additional handling costs, and/or require the expenditure of capital. If we are unable to procure product or to recover these costs through increased sales, our ability to meet our financial obligations could be adversely affected. Failure to comply with these regulations could result in substantial penalties. Please read "Business—Environmental" for more information.

         Our operations are subject to federal, state and local laws and regulations pertaining to environmental protection or operational safety that may require significant expenditures or result in liabilities that could have a material adverse effect on our business.

        Our business is subject to various federal, state and local environmental laws and regulations, including those relating to underground storage tanks, the release or discharge of regulated materials into the air, water and soil, the generation, storage, handling, use, transportation and disposal of hazardous materials, the exposure of persons to regulated materials, and the health and safety of our employees. We believe we are in material compliance with applicable environmental requirements; however, we cannot assure you that violations of these requirements will not occur in the future. We also cannot assure you that we will not be subject to legal actions brought by third parties for actual or alleged violations of or responsibility under environmental laws associated with releases of or exposure to motor fuel products. A violation of, liability under or compliance with these laws or regulations or any future environmental laws or regulations, could have a material adverse effect on our business and results of operations.

        Where releases of refined petroleum products, renewable fuels and crude oil have occurred, federal and state laws and regulations require that such releases be assessed and remediated to meet applicable standards. The costs associated with the investigation and remediation of any such releases, as well as any associated third-party claims, could be substantial, and could have a material adverse effect on our business and results of operations and our ability to make distributions to our unitholders.

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         New, stricter environmental laws and regulations could significantly increase our costs, which could adversely affect our results of operations and financial condition.

        Our operations are subject to federal, state and local laws and regulations regulating environmental matters. The trend in environmental regulation is towards more restrictions and limitations on activities that may affect the environment. Our business may be adversely affected by increased costs and liabilities resulting from such stricter laws and regulations. We try to anticipate future regulatory requirements that might be imposed and plan accordingly to remain in compliance with changing environmental laws and regulations and to minimize the costs of such compliance. However, there can be no assurances as to the timing and type of such changes in existing laws or the promulgation of new laws or the amount of any required expenditures associated therewith.

         The ethanol industry is highly dependent upon government usage mandates and tax credits. Changes to these mandates and/or tax credits could adversely affect the availability and pricing of ethanol and negatively impact our motor fuel sales.

        Future demand for ethanol will be largely dependent upon the economic incentives to blend based upon the relative value of gasoline and ethanol, taking into consideration the Environmental Protection Agency's, or "EPA's," regulations on the Renewable Fuel Standards, or "RFS," program and oxygenate blending requirements. A reduction or waiver of the RFS mandate or oxygenate blending requirements could adversely affect the availability and pricing of ethanol, which in turn could adversely affect our future motor fuel sales.

         We depend on transportation providers for the transportation of substantially all of our motor fuel. Thus, a change of providers or a significant change in our relationship could have a material adverse effect on our business.

        Substantially all of the motor fuel we distribute is transported from refineries to gas stations by third party carriers. A change of transportation providers, a disruption in service or a significant change in our relationship with these transportation carriers could have a material adverse effect on our business, results of operations and cash available for distribution.

         We rely heavily on our information technology systems to manage our business, and a disruption of these systems or an act of cyber-terrorism could adversely affect our business.

        We depend on our information technology systems to manage numerous aspects of our business transactions, in particular with respect to our cash management and disbursements and payroll, and provide analytical information to management. Our information systems are an essential component of our business, and a serious disruption to our information systems could significantly limit our ability to manage and operate our business efficiently. These systems are vulnerable to, among other things, damage and interruption from power loss or natural disasters, computer system and network failures, loss of telecommunications services, physical and electronic loss of data, cyber-security breaches or cyber-terrorism, and computer viruses. Any disruption could adversely affect our business.

         Any terrorist attacks aimed at our facilities could adversely affect our business, and any global and domestic economic repercussions from terrorist activities and the government's response could adversely affect our business.

        Since the September 11, 2001 terrorist attacks on the United States, the U.S. government has issued warnings that energy infrastructure assets may be future targets of terrorist organizations.

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These developments have subjected our operations to increased risks. Terrorist attacks aimed at our facilities and any global and domestic economic repercussions from terrorist activities could adversely affect our financial condition, results of operations and cash available for distribution to our unitholders. For instance, terrorist activity could lead to increased volatility in prices for motor fuels and other products we sell.

        Insurance carriers are currently required to offer coverage for terrorist activities as a result of the federal Terrorism Risk Insurance Act of 2002, which we refer to as "TRIA." We purchased this coverage with respect to our property and casualty insurance programs, which resulted in additional insurance premiums. Pursuant to the Terrorism Risk Insurance Program Reauthorization Act of 2007, TRIA has been extended through December 31, 2014. Although we cannot determine the future availability and cost of insurance coverage for terrorist acts, we do not expect the availability and cost of such insurance to have a material adverse effect on our financial condition, results of operations or cash available for distribution to our unitholders.

Risks Inherent in an Investment in Us

         The Topper Group indirectly controls our general partner, which has sole responsibility for conducting our business and managing our operations. Our general partner and its affiliates, including the Topper Group, have conflicts of interest with us and limited fiduciary duties, and they may favor their own interests to the detriment of us and our unitholders.

        Following this offering, the Topper Group and LGC will collectively own a 60.1% limited partner interest in us and will own and control our general partner and will appoint all of the directors of our general partner. Although our general partner has a fiduciary duty to manage us in a manner beneficial to us and our unitholders, the executive officers and directors of our general partner have a fiduciary duty to manage our general partner in a manner beneficial to its owner, LGC, which is majority owned and controlled by the Topper Group. Furthermore, certain directors and officers of our general partner are directors or officers of affiliates of our general partner. Therefore, conflicts of interest may arise in the future between us and our unitholders, on the one hand, and our general partner and its affiliates, including the Topper Group and LGC, on the other hand. In resolving these conflicts of interest, our general partner may favor its own interests and the interests of its affiliates, including the Topper Group and LGC, over the interests of our common unitholders. Please read "—Our partnership agreement replaces our general partner's fiduciary duties to holders of our units." These conflicts include the following situations, among others:

    our general partner is allowed to take into account the interests of parties other than us, such as the Topper Group and LGC, in resolving conflicts of interest, which has the effect of limiting its fiduciary duty to our unitholders;

    neither our partnership agreement nor any other agreement requires the Topper Group or LGC to pursue a business strategy that favors us;

    some officers of our general partner who will provide services to us will devote time to affiliates of our general partner and may be compensated for services rendered to such affiliate;

    our partnership agreement limits the liability of and reduces fiduciary duties owed by our general partner and also restricts the remedies available to unitholders for actions that, without the limitations, might constitute breaches of fiduciary duty;

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    except in limited circumstances, our general partner has the power and authority to conduct our business without unitholder approval;

    our general partner determines the amount and timing of asset purchases and sales, borrowings, issuances of additional partnership securities and the creation, reductions or increases of cash reserves, each of which can affect the amount of cash that is available for distribution to our unitholders, including distributions on our subordinated units, and to the holders of the incentive distribution rights, as well as the ability of the subordinated units to convert to common units;

    our general partner determines the amount and timing of any capital expenditures and whether a capital expenditure is classified as a maintenance capital expenditure, which reduces operating surplus. Please read "How We Make Distributions to Our Partners—Capital Expenditures" for a discussion on when a capital expenditure constitutes a maintenance capital expenditure or an expansion capital expenditure. Such determination can affect the amount of cash available for distribution to our unitholders, including distributions on our subordinated units, and to the holders of the incentive distribution rights, as well as the ability of the subordinated units to convert to common units;

    we will enter into lease agreements and a wholesale supply agreement with LGO pursuant to which LGO will lease sites from us and operate the retail motor fuel distribution business of our predecessor. LGO will purchase motor fuels from us at a variable rate mark-up;

    in the event we are unable to obtain consents for the assignment by our predecessor to us of certain supply and lease agreements, LGC and the Topper Group will be required under the omnibus agreement to provide us with the benefits of these agreements at no additional cost to us, and we will be required to perform the obligations under these agreements;

    our general partner may cause us to borrow funds in order to permit the payment of cash distributions, even if the purpose or effect of the borrowing is to make a distribution on the subordinated units, to make incentive distributions or to accelerate the expiration of the subordination period;

    our partnership agreement permits us to distribute up to $15 million as operating surplus, even if it is generated from asset sales, non-working capital borrowings or other sources that would otherwise constitute capital surplus. This cash may be used to fund distributions on our subordinated units or the incentive distribution rights;

    our partnership agreement does not restrict our general partner from causing us to pay it or its affiliates for any services rendered to us or entering into additional contractual arrangements with its affiliates on our behalf;

    our general partner intends to limit its liability regarding our contractual and other obligations;

    our general partner may exercise its right to call and purchase common units if it and its affiliates own more than 80% of the common units;

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    our general partner controls the enforcement of obligations that it and its affiliates owe to us;

    our general partner decides whether to retain separate counsel, accountants or others to perform services for us;

    our general partner may transfer its incentive distribution rights without unitholder approval; and

    our general partner may elect to cause us to issue common units to it in connection with a resetting of the target distribution levels related to our general partner's incentive distribution rights without the approval of the conflicts committee of the board of directors of our general partner or the unitholders. This election may result in lower distributions to the common unitholders in certain situations.

        In addition, the Topper Group and its affiliates currently hold substantial interests in other companies that engage in the wholesale motor fuel distribution business and/or own sites. Except as set forth in the omnibus agreement, we may compete directly with entities in which the Topper Group or its affiliates have an interest for acquisition opportunities and potentially will compete with these entities for new business or extensions of the existing services provided by us. Please read "—Our general partner's affiliates may compete with us," and "Conflicts of Interest and Fiduciary Duties."

         The board of directors of our general partner may modify or revoke our cash distribution policy at any time at its discretion. Our partnership agreement does not require us to pay any distributions at all.

        The board of directors of our general partner has adopted a cash distribution policy pursuant to which we intend to distribute quarterly an amount at least equal to the minimum quarterly distribution of $0.4375 per unit on all of our units to the extent we have sufficient cash from our operations after the establishment of reserves and the payment of our expenses. However, the board may change such policy at any time at its discretion and could elect not to pay distributions for one or more quarters. See "Cash Distribution Policy and Restrictions on Distributions."

        In addition, our partnership agreement does not require us to pay any distributions at all. Accordingly, investors are cautioned not to place undue reliance on the permanence of such a policy in making an investment decision. Any modification or revocation of our cash distribution policy could substantially reduce or eliminate the amounts of distributions to our unitholders. The amount of distributions we make, if any, and the decision to make any distribution at all will be determined by the board of directors of our general partner, whose interests may differ from those of our common unitholders. Our general partner has limited duties to our unitholders, which may permit it to favor its own interests or the interests of the Topper Group and LGC to the detriment of our common unitholders.

         Neither we nor our general partner have any employees and we will rely solely on the employees of LGC to manage our business. If our omnibus agreement with LGC is terminated, we may not find suitable replacements to perform management services for us.

        Neither we nor our general partner have any employees and we will rely solely on LGC to operate our assets. Immediately prior to the closing of this offering, we and our general partner will enter into an omnibus agreement with LGC pursuant to which LGC will perform services for

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us and our general partner, including the operation of our wholesale distribution business and our properties. We are subject to the risk that our omnibus agreement will be terminated and no suitable replacement will be found. Please read "Certain Relationships and Related Party Transactions—Agreements with Affiliates—Omnibus Agreement."

         The liability of LGC is limited under our omnibus agreement and we have agreed to indemnify LGC against certain liabilities, which may expose us to significant expenses.

        The omnibus agreement provides that we must indemnify LGC for any liabilities incurred by LGC attributable to the operating and administrative services provided to us under the agreement, other than liabilities resulting from LGC's bad faith or willful misconduct.

         Our general partner intends to limit its liability regarding our obligations.

        Our general partner intends to limit its liability under contractual arrangements between us and third parties so that the counterparties to such arrangements have recourse only against our assets, and not against our general partner or its assets. Our general partner may therefore cause us to incur indebtedness or other obligations that are nonrecourse to our general partner. Our partnership agreement provides that any action taken by our general partner to limit its liability is not a breach of our general partner's fiduciary duties, even if we could have obtained more favorable terms without the limitation on liability. In addition, we are obligated to reimburse or indemnify our general partner to the extent that it incurs obligations on our behalf. Any such reimbursement or indemnification payments would reduce the amount of cash otherwise available for distribution to our unitholders.

         If we distribute a significant portion of our cash available for distribution to our partners, our ability to grow and make acquisitions could be limited.

        We may determine to distribute a significant portion of our cash available for distribution to our unitholders. In addition, we expect to rely primarily upon external financing sources, including commercial bank borrowings and the issuance of debt and equity securities, to fund our acquisitions and expansion capital expenditures. To the extent we are unable to finance growth externally, distributing a significant portion of our cash available for distribution may impair our ability to grow.

        In addition, if we distribute a significant portion of our cash available for distribution, our growth may not be as fast as that of businesses that reinvest their cash available for distribution to expand ongoing operations. To the extent we issue additional units in connection with any acquisitions or expansion capital expenditures, the payment of distributions on those additional units may increase the risk that we will be unable to maintain or increase our per unit distribution level. There are no limitations in our partnership agreement or our new credit agreement on our ability to issue additional units, provided there is no event of default under the new credit agreement, including units ranking senior to the common units. The incurrence of additional commercial borrowings or other debt to finance our growth strategy would result in increased interest expense, which, in turn, may impact the cash available for distribution to our unitholders.

         There are no limitations in our partnership agreement on our ability to issue units ranking senior to the common units.

        In accordance with Delaware law and the provisions of our partnership agreement, we may issue additional partnership interests that are senior to the common units in right of distribution,

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liquidation and voting. The issuance by us of units of senior rank may (i) reduce or eliminate the amount of cash available for distribution to our common unitholders; (ii) diminish the relative voting strength of the total common units outstanding as a class; or (iii) subordinate the claims of the common unitholders to our assets in the event of our liquidation.

         Our partnership agreement replaces our general partner's fiduciary duties to holders of our units.

        Our partnership agreement contains provisions that eliminate and replace the fiduciary standards to which our general partner would otherwise be held by state fiduciary duty law. For example, our partnership agreement permits our general partner to make a number of decisions in its individual capacity, as opposed to in its capacity as our general partner, or otherwise free of fiduciary duties to us and our unitholders. This entitles our general partner to consider only the interests and factors that it desires and relieves it of any duty or obligation to give any consideration to any interest of, or factors affecting, us, our affiliates or our limited partners. Examples of decisions that our general partner may make in its individual capacity include:

    how to allocate business opportunities among us and its affiliates;

    whether to exercise its call right;

    how to exercise its voting rights with respect to the units it owns;

    whether to exercise its registration rights;

    whether to elect to reset target distribution levels; and

    whether or not to consent to any merger or consolidation of the partnership or amendment to the partnership agreement.

        By purchasing a common unit, a unitholder is treated as having consented to the provisions in the partnership agreement, including the provisions discussed above. Please read "Conflicts of Interest and Fiduciary Duties—Fiduciary Duties."

         Our partnership agreement restricts the remedies available to holders of our units for actions taken by our general partner that might otherwise constitute breaches of fiduciary duty.

        Our partnership agreement contains provisions that restrict the remedies available to unitholders for actions taken by our general partner that might otherwise constitute breaches of fiduciary duty under state fiduciary duty law. For example, our partnership agreement:

    provides that whenever our general partner makes a determination or takes, or declines to take, any other action in its capacity as our general partner, our general partner is required to make such determination, or take or decline to take such other action, in good faith, and will not be subject to any other or different standard imposed by our partnership agreement, Delaware law, or any other law, rule or regulation, or at equity;

    provides that our general partner will not have any liability to us or our unitholders for decisions made in its capacity as a general partner so long as it acted in good faith, meaning that it believed that the decision was in the best interest of our partnership;

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    provides that our general partner and its officers and directors will not be liable for monetary damages to us or our limited partners resulting from any act or omission unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that our general partner or its officers and directors, as the case may be, acted in bad faith or, in the case of a criminal matter, acted with knowledge that the conduct was criminal; and

    provides that our general partner will not be in breach of its obligations under the partnership agreement or its fiduciary duties to us or our limited partners if a transaction with an affiliate or the resolution of a conflict of interest is:

    (1)
    approved by the conflicts committee of the board of directors of our general partner, although our general partner is not obligated to seek such approval; or

    (2)
    approved by the vote of a majority of the outstanding common units, excluding any common units owned by our general partner and its affiliates.

        In connection with a situation involving a transaction with an affiliate or a conflict of interest, any determination by our general partner must be made in good faith. If an affiliate transaction or the resolution of a conflict of interest is not approved by our common unitholders or the conflicts committee, then it will be presumed that, in making its decision, taking any action or failing to act, the board of directors acted in good faith, and in any proceeding brought by or on behalf of any limited partner or the partnership, the person bringing or prosecuting such proceeding will have the burden of overcoming such presumption. Please read "Conflicts of Interest and Fiduciary Duties."

         Our general partner's affiliates may compete with us.

        Our partnership agreement provides that our general partner will be restricted from engaging in any business activities other than acting as our general partner and those activities incidental to its ownership interest in us. Except as provided in the omnibus agreement, affiliates of our general partner are not prohibited from engaging in other businesses or activities, including those that might be in direct competition with us. Please read "Certain Relationships and Related Party Transactions—Agreements with Affiliates—Omnibus Agreement."

        Pursuant to the terms of our partnership agreement, the doctrine of corporate opportunity, or any analogous doctrine, does not apply to our general partner, LGO or any of their affiliates, including their executive officers, directors and the Topper Group and LGC. Any such person or entity that becomes aware of a potential transaction, agreement, arrangement or other matter that may be an opportunity for us will not have any duty to communicate or offer such opportunity to us. Any such person or entity will not be liable to us or to any limited partner for breach of any fiduciary duty or other duty by reason of the fact that such person or entity pursues or acquires such opportunity for itself, directs such opportunity to another person or entity or does not communicate such opportunity or information to us. This may create actual and potential conflicts of interest between us and affiliates of our general partner and result in less than favorable treatment of us and our unitholders. Please read "Conflicts of Interest and Fiduciary Duties."

        The Topper Group and LGO are subject to a right of first refusal provision in the omnibus agreement that prohibits them from acquiring any assets or any business having assets that are primarily involved in the wholesale motor fuel distribution or retail gas station operation businesses without first offering such acquisition opportunity to us. However, the omnibus

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agreement does not prohibit affiliates of our general partner and LGO, including the Topper Group and LGC, from owning certain assets or engaging in certain businesses that compete directly or indirectly with us. Conflicts of interest may arise in the future between us and our unitholders, on the one hand, and the affiliates of our general partner and LGO, including the Topper Group and LGC, on the other hand. In resolving these conflicts, the Topper Group and LGO may favor their own interests and the interests over the interests of our unitholders. Please read "Certain Relationships and Related Party Transactions—Agreements with Affiliates—Omnibus Agreement."

         Our general partner may elect to cause us to issue common units to it in connection with a resetting of the target distribution levels related to its incentive distribution rights, without the approval of the conflicts committee of its board of directors or the holders of our common units. This could result in lower distributions to holders of our common units.

        Our general partner has the right, as the holder of our incentive distribution rights, at any time when there are no subordinated units outstanding and it has received incentive distributions at the highest level to which it is entitled (50%) for each of the prior four consecutive fiscal quarters, to reset the initial target distribution levels at higher levels based on our distributions at the time of the exercise of the reset election. Following a reset election by our general partner, the minimum quarterly distribution will be adjusted to equal the reset minimum quarterly distribution and the target distribution levels will be reset to correspondingly higher levels based on percentage increases above the reset minimum quarterly distribution.

        If our general partner elects to reset the target distribution levels, it will be entitled to receive a number of common units. The number of common units to be issued to our general partner will equal the number of common units which would have entitled the holder to an aggregate quarterly cash distribution in the prior quarter equal to the distributions to our general partner on the incentive distribution rights in the prior quarter. It is possible that our general partner could exercise this reset election at a time when it is experiencing, or expects to experience, declines in the cash distributions it receives related to its incentive distribution rights and may, therefore, desire to be issued common units rather than retain the right to receive incentive distributions based on the initial target distribution levels. This risk could be elevated if our incentive distribution rights have been transferred to a third party. As a result, a reset election may cause our common unitholders to experience a reduction in the amount of cash distributions that our common unitholders would have otherwise received had we not issued new common units to our general partner in connection with resetting the target distribution levels. Please read "How We Make Distributions to Our Partners—General Partner's Right to Reset Incentive Distribution Levels."

         Holders of our common units have limited voting rights and are not entitled to elect our general partner or its directors, which could reduce the price at which the common units will trade.

        Unlike the holders of common stock in a corporation, unitholders have only limited voting rights on matters affecting our business and, therefore, limited ability to influence management's decisions regarding our business. Unitholders will have no right on an annual or ongoing basis to elect our general partner or its board of directors. The board of directors of our general partner, including the independent directors, is chosen entirely by the Topper Group, as a result of its indirect controlling ownership interest of our general partner, and not by our unitholders. Please read "Management—Management of Lehigh Gas Partners LP" and "Certain Relationships and Related Party Transactions—Ownership of Our General Partner." Unlike publicly traded

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corporations, we will not conduct annual meetings of our unitholders to elect directors or conduct other matters routinely conducted at annual meetings of stockholders of corporations. As a result of these limitations, the price at which the common units will trade could be diminished because of the absence or reduction of a takeover premium in the trading price.

         Even if holders of our common units are dissatisfied, they cannot initially remove our general partner without its consent.

        If our unitholders are dissatisfied with the performance of our general partner, they will have limited ability to remove our general partner. Unitholders initially will be unable to remove our general partner without its consent because our general partner and its affiliates will own sufficient units upon the completion of this offering to be able to prevent its removal. The vote of the holders of at least 662/3% of all outstanding common and subordinated units voting together as a single class is required to remove our general partner. Following the closing of this offering, the Topper Group and LGC will own, in the aggregate, approximately 20.3% of our outstanding common units and 100.0% of our subordinated units (or 8.3% of our common units and 100.0% of our subordinated units, if the underwriters exercise their option to purchase additional common units in full). Also, if our general partner is removed without cause during the subordination period and no units held by the holders of the subordinated units or their affiliates are voted in favor of that removal, all remaining subordinated units will automatically be converted into common units and any existing arrearages on the common units will be extinguished. Cause is narrowly defined in our partnership agreement to mean that a court of competent jurisdiction has entered a final, non-appealable judgment finding our general partner liable for acting in bad faith, or in the case of a criminal matter, acting with knowledge that the conduct was criminal, in each case in its capacity as our general partner. Cause does not include most cases of charges of poor management of the business.

         Unitholders will experience immediate and substantial dilution of $19.78 per common unit.

        The assumed initial public offering price of $20.00 per common unit exceeds pro forma net tangible book value of $0.22 per common unit. Based on the assumed initial public offering price of $20.00 per common unit, unitholders will incur immediate and substantial dilution of $19.78 per common unit. This dilution results primarily because the assets contributed to us by affiliates of our general partner are recorded at their historical cost in accordance with GAAP, and not their fair value. Please read "Dilution."

         Our general partner interest or the control of our general partner may be transferred to a third party without unitholder consent.

        Our general partner may transfer its general partner interest to a third party in a merger or in a sale of all or substantially all of its assets without the consent of our unitholders. Furthermore, our partnership agreement does not restrict the ability of the members of our general partner to transfer their respective membership interests in our general partner to a third party. The new members of our general partner would then be in a position to replace the board of directors and executive officers of our general partner with their own designees and thereby exert significant control over the decisions taken by the board of directors and executive officers of our general partner. This effectively permits a "change of control" without the vote or consent of the unitholders.

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         Our general partner has a call right that may require unitholders to sell their common units at an undesirable time or price.

        If at any time our general partner and its affiliates own more than 80% of the common units, our general partner will have the right, but not the obligation, which it may assign to any of its affiliates or to us, to acquire all, but not less than all, of the common units held by unaffiliated persons at a price equal to the greater of (1) the average of the daily closing price of the common units over the 20 trading days preceding the date three days before notice of exercise of the call right is first mailed and (2) the highest per-unit price paid by our general partner or any of its affiliates for common units during the 90-day period preceding the date such notice is first mailed. As a result, unitholders may be required to sell their common units at an undesirable time or price and may not receive any return or a negative return on their investment. Unitholders may also incur a tax liability upon a sale of their units. Our general partner is not obligated to obtain a fairness opinion regarding the value of the common units to be repurchased by it upon exercise of the call right. There is no restriction in our partnership agreement that prevents our general partner from issuing additional common units and exercising its call right. If our general partner exercised its call right, the effect would be to take us private and, if the units were subsequently deregistered, we would no longer be subject to the reporting requirements of the Securities Exchange Act of 1934, or the Exchange Act. Upon consummation of this offering and assuming no exercise of the underwriters' option to purchase additional common units, the Topper Group will own approximately 20.3% of our outstanding common units and 67.1% of our subordinated units. LGC will own 32.9% of our subordinated units. At the end of the subordination period, assuming no additional issuances of units (other than upon the conversion of the subordinated units), the Topper Group will own 43.7% and LGC will own 16.4% of our common units. For additional information about the call right, please read "The Partnership Agreement—Call Right."

         The market price of our common units could be adversely affected by sales of substantial amounts of our common units in the public or private markets, including sales by the Topper Group, LGC or other large holders.

        After this offering, we will have 7,525,000 common units and 7,525,000 subordinated units outstanding, which include the 6,000,000 common units we are selling in this offering that may be resold in the public market immediately. At the end of the subordination period, all of the subordinated units will convert into an equal number of common units. All of the 1,525,000 common units (625,000 common units if the underwriters exercise their option to purchase additional common units in full) that are issued to affiliates of our general partner will be subject to resale restrictions under a 180-day lock-up agreement with the underwriters. Each of the lock-up agreements with the underwriters may be waived in the discretion of certain of the underwriters. Sales by affiliates of our general partner or other large holders of a substantial number of our common units in the public markets following this offering, or the perception that such sales might occur, could have a material adverse effect on the price of our common units or could impair our ability to obtain capital through an offering of equity securities. In addition, we have agreed to provide registration rights to the Topper Group and LGC. Under our partnership agreement and pursuant to a registration rights agreement that we will enter into in connection with the closing of this offering, our general partner and its affiliates have registration rights relating to the offer and sale of any units that they hold, subject to certain limitations. Please read "Units Eligible for Future Sale."

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         We may issue unlimited additional units without unitholder approval, which would dilute existing unitholder ownership interests.

        Our partnership agreement does not limit the number of additional limited partner interests, including limited partner interests that rank senior to the common units that we may issue at any time without the approval of our unitholders. The issuance of additional common units or other equity interests of equal or senior rank could have the following effects:

    our existing unitholders' proportionate ownership interest in us will decrease;

    the amount of cash available for distribution on each unit may decrease;

    because a lower percentage of total outstanding units will be subordinated units, the risk that a shortfall in the payment of the minimum quarterly distribution will be borne by our common unitholders will increase;

    the ratio of taxable income to distributions may increase;

    the relative voting strength of each previously outstanding unit may be diminished;

    the claims of the common unitholders to our assets in the event of our liquidation may be subordinated; and

    the market price of the common units may decline.

         Our general partner's discretion in establishing cash reserves may reduce the amount of cash available for distribution to unitholders.

        The partnership agreement requires our general partner to deduct from operating surplus cash reserves that it determines are necessary to fund our future operating expenditures. The general partner may reduce cash available for distribution by establishing cash reserves for the proper conduct of our business, to comply with applicable law or agreements to which we are a party or to provide funds for future distributions to partners. These cash reserves will affect the amount of cash available for distribution to unitholders.

         Our partnership agreement restricts the voting rights of unitholders owning 20% or more of our common units.

        Our partnership agreement restricts unitholders' voting rights by providing that any units held by a person or group that owns 20% or more of any class of units then outstanding, other than our general partner and its affiliates, their transferees and persons who acquired such units with the prior approval of the board of directors of our general partner, cannot vote on any matter.

         Restrictions in our new credit agreement could limit our ability to pay distributions upon the occurrence of certain events.

        Our payment of principal and interest on our debt will reduce cash available for distribution on our units. Our new credit agreement will limit our ability to pay distributions upon the occurrence of the following events, among others:

    failure to pay any principal when due or any interest, fees or other amounts when due;

    failure of any representation or warranty to be true and correct in any material respect;

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    failure to perform or otherwise comply with the covenants in the new credit agreement or in other loan documents beyond the applicable notice and grace period;

    any default in the performance of any obligation or condition beyond the applicable grace period relating to any other indebtedness of more than $3.0 million;

    failure of the lenders to have a perfected first priority security interest in the collateral pledged by any loan party;

    the entry of a judgment in excess of a specified amount, to the extent any payments pursuant to the judgment are not covered by insurance;

    a change in management or ownership control;

    a violation of the Employee Retirement Income Security Act of 1974, or "ERISA;" and

    a bankruptcy or insolvency event involving us or any of our subsidiaries.

        Any subsequent refinancing of our current debt or any new debt could have similar restrictions. For more information, please read "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—New Credit Agreement."

         Management fees and cost reimbursements due to our general partner and its affiliates for services provided to us or on our behalf will reduce cash available for distribution to our unitholders. The amount and timing of such reimbursements will be determined by our general partner.

        Prior to making any distribution on the common units, we will pay LGC the management fee and reimburse our general partner and LGC for all out-of-pocket third-party expenses they incur and payments they make on our behalf. Our partnership agreement provides that our general partner will determine in good faith the expenses that are allocable to us. In addition, pursuant to an omnibus agreement, the Topper Group and LGC will be entitled to reimbursement for certain expenses that they incur on our behalf. Our partnership agreement does not limit the amount of expenses for which our general partner and its affiliates may be reimbursed. The reimbursement of expenses and payment of fees, if any, to our general partner and its affiliates will reduce the amount of cash available to pay distributions to our unitholders. Please read "Cash Distribution Policy and Restrictions on Distributions."

         Unitholders may have liability to repay distributions and in certain circumstances may be personally liable for the obligations of the partnership.

        Under certain circumstances, unitholders may have to repay amounts wrongfully returned or distributed to them. Under Section 17-607 of the Delaware Revised Uniform Limited Partnership Act, or the Delaware Act, we may not make a distribution to our unitholders if the distribution would cause our liabilities to exceed the fair value of our assets. Delaware law provides that for a period of three years from the date of the impermissible distribution, limited partners who received the distribution and who knew at the time of the distribution that it violated Delaware law will be liable to the limited partnership for the distribution amount. Liabilities to partners on account of their partnership interests and liabilities that are non-recourse to the partnership are not counted for purposes of determining whether a distribution is permitted.

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        It may be determined that the right, or the exercise of the right by the limited partners as a group, to (i) remove or replace our general partner, (ii) approve some amendments to our partnership agreement or (iii) take other action under our partnership agreement constitutes "participation in the control" of our business. A limited partner that participates in the control of our business within the meaning of the Delaware Act may be held personally liable for our obligations under the laws of Delaware, to the same extent as our general partner. This liability would extend to persons who transact business with us under the reasonable belief that the limited partner is a general partner. Neither our partnership agreement nor the Delaware Act specifically provides for legal recourse against our general partner if a limited partner were to lose limited liability through any fault of our general partner. See "The Partnership Agreement—Limited Liability."

         The New York Stock Exchange, or "NYSE," does not require a publicly traded partnership like us to comply with certain of its corporate governance requirements.

        Our common units have been approved for listing on the NYSE. Because we will be a publicly traded partnership, the NYSE will not require us to have a majority of independent directors on our general partner's board of directors. Additionally, while we will initially establish a compensation committee and a nominating and corporate governance committee, the NYSE does not require us as a publicly traded partnership to maintain a compensation committee or a nominating and corporate governance committee. Accordingly, unitholders will not have the same protections afforded to certain corporations that are subject to all of the NYSE corporate governance requirements. Please read "Management—Management of Lehigh Gas Partners LP."

         Our predecessor has material weaknesses in its internal controls over financial reporting. If we fail to establish and maintain effective internal controls over financial reporting, our ability to accurately report our financial results could be adversely affected.

        Prior to the completion of this offering, certain entities that comprise our predecessor have been private entities with limited accounting personnel and other supervisory resources to adequately execute their accounting processes and address their internal controls over financial reporting. In connection with the preparation of our predecessor's combined financial statements for the years ended December 31, 2011, 2010 and 2009, we identified and communicated material weaknesses related to lack of accounting personnel with sufficient technical accounting experience for certain significant or unusual transactions and lack of adequate staffing and management review by the appropriate level during our predecessor's month-end closing process. A "material weakness" is a deficiency, or combination of deficiencies, in internal controls such that there is a reasonable possibility that a material misstatement of our predecessor's financial statements will not be prevented, or detected in a timely basis. The lack of technical accounting experience and management review resulted in several adjustments to the financial statements for the years ended December 31, 2011, 2010, and 2009.

        After the closing of this offering, our management team and financial reporting oversight personnel will be those of our predecessor, and thus, we may face the same material weaknesses described above.

        We are in the early phases of evaluating the design and operation of our internal controls over financial reporting and will not complete our review until after this offering is completed. We cannot predict the outcome of our review at this time. During the course of the review, we may identify additional control deficiencies, which could give rise to significant deficiencies and other material weaknesses, in addition to the material weaknesses described above. Each of the

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material weaknesses described above could result in a misstatement of our accounts or disclosures that would result in a material misstatement of our annual or interim combined financial statements that would not be prevented or detected. We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to remediate the material weaknesses described above or avoid potential future material weaknesses.

        We are not currently required to comply with the SEC's rules implementing Section 404 of the Sarbanes Oxley Act of 2002, and are therefore not required to make a formal assessment of the effectiveness of our internal controls over financial reporting for that purpose. Upon becoming a publicly traded partnership, we will be required to comply with the SEC's rules implementing Sections 302 and 404 of the Sarbanes Oxley Act of 2002, which will require our management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of our internal controls over financial reporting. Though we will be required to disclose changes made to our internal controls and procedures on a quarterly basis, we will not be required to make our first annual assessment of our internal controls over financial reporting pursuant to Section 404 until the year following our first annual report required to be filed with the SEC. To comply with the requirements of being a publicly traded partnership, we will need to implement additional internal controls, reporting systems and procedures and hire additional accounting, finance and legal staff.

        Further, our independent registered public accounting firm is not yet required to formally attest to the effectiveness of our internal controls over financial reporting until the year following our first annual report required to be filed with the SEC. If it is required to do so, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating. Our remediation efforts may not enable us to remedy or avoid material weaknesses or significant deficiencies in the future. If our remediation efforts are unsuccessful, we could be subject to regulatory scrutiny and a loss of confidence in our reported financial information, which could have an adverse effect on our business and would likely have a negative effect on the trading price of our common units.

         There is no existing market for our common units, and a trading market that will provide you with adequate liquidity may not develop. The price of our common units may fluctuate significantly, and unitholders could lose all or part of their investment.

        Prior to this offering, there has been no public market for the common units. After this offering, there will be only 6,000,000 publicly traded common units representing a 39.9% limited partner interest in us. We do not know the extent to which investor interest will lead to the development of a trading market or how liquid that market might be. Unitholders may not be able to resell their common units at or above the initial public offering price. Additionally, the lack of liquidity may result in wide bid-ask spreads, contribute to significant fluctuations in the market price of the common units and limit the number of investors who are able to buy the common units.

        The initial public offering price for our common units will be determined by negotiations between us and the representative of the underwriters and may not be indicative of the market price of the common units that will prevail in the trading market. The market price of our common units may decline below the initial public offering price. The market price of our

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common units may also be influenced by many factors, some of which are beyond our control, including:

    our quarterly distributions;

    our quarterly or annual earnings or those of other companies in our industry;

    announcements by us or our competitors of significant contracts or acquisitions;

    changes in accounting standards, policies, guidance, interpretations or principles;

    general economic conditions;

    volatility in the capital and credit markets;

    the failure of securities analysts to cover our common units after this offering or changes in financial estimates by analysts;

    future sales of our common units; and

    the other factors described in these "Risk Factors."

         An increase in interest rates may cause the market price of our common units to decline.

        Like all equity investments, an investment in our common units is subject to certain risks. Borrowings under the new credit facility will bear interest at variable rates. If market interest rates increase, such variable-rate debt will create higher debt service requirements, which could adversely affect our cash flow and ability to make cash distributions. In exchange for accepting these risks, investors may expect to receive a higher rate of return than would otherwise be obtainable from lower-risk investments. Accordingly, as interest rates rise, the ability of investors to obtain higher risk-adjusted rates of return by purchasing government-backed debt securities may cause a corresponding decline in demand for riskier investments generally, including yield-based equity investments such as publicly traded limited partnership interests. Reduced demand for our common units resulting from investors seeking other more favorable investment opportunities may cause the trading price of our common units to decline.

         We will incur increased costs as a result of being a publicly traded partnership.

        We have no history operating as a publicly traded partnership. As a publicly traded partnership, we will incur significant legal, accounting and other expenses that we did not incur prior to this offering. In addition, the Sarbanes-Oxley Act of 2002, as well as rules implemented by the SEC and the NYSE, require publicly traded entities to adopt various corporate governance practices that will further increase our costs. Before we are able to make distributions to our members, we must first pay or reserve cash for our expenses, including the costs of being a publicly traded partnership. As a result, the amount of cash we have available for distribution to our members will be affected by the costs associated with being a publicly traded partnership.

        Prior to this offering, we have not filed reports with the SEC. Following this offering, we will become subject to the public reporting requirements of the Exchange Act. We expect these rules and regulations to increase certain of our legal and financial compliance costs and to make activities more time-consuming and costly. For example, as a result of becoming a publicly traded partnership, we are required to have at least three independent directors, create an audit

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committee and adopt policies regarding internal controls and disclosure controls and procedures, including the preparation of reports on internal controls over financial reporting. In addition, we will incur additional costs associated with our SEC reporting requirements.

        We also expect to incur significant expenses in order to obtain director and officer liability insurance. Because of the limitations in coverage for directors, it may be more difficult for us to attract and retain qualified persons to serve on our board or as executive officers.

        We estimate that we will incur approximately $2.3 million of incremental costs per year associated with being a publicly traded partnership; however, it is possible that our actual incremental costs of being a publicly traded partnership will be higher than we currently estimate.

Tax Risks

        In addition to reading the following risk factors, you should read "Material U.S. Federal Income Tax Consequences" for a more complete discussion of the expected material U.S. federal income tax consequences of owning and disposing of common units.

         Our U.S. federal (and state and local) income tax treatment depends in large part on our status as a partnership for U.S. federal income tax purposes and our otherwise not being subject to a material amount of U.S. federal, state and local income or franchise tax. If we were required to be treated as a corporation for U.S. federal income tax purposes or if we were to otherwise be subject to a material amount of additional entity-level income, franchise or other taxation for U.S. federal, state or local tax purposes, then our cash available for distribution to you would be substantially reduced. We currently have a subsidiary that is treated as a corporation for U.S. federal income tax purposes and is subject to entity-level U.S. federal, state and local income and franchise tax.

        The anticipated after-tax benefit of an investment in our common units depends largely on our being treated as a partnership for U.S. federal income tax purposes. A publicly traded partnership, such as us, may be treated as a corporation for U.S. federal income tax purposes unless 90% or more of its gross income for every taxable year it is publicly traded consists of "qualifying income." Based on our current operations we believe that we will be able to satisfy this requirement and, thus, be able to be treated as a partnership, rather than a corporation, for U.S. federal income tax purposes.

        Moreover, a change in our business (or a change in current law) could also cause us to be treated as a corporation for U.S. federal income tax purposes. We have not requested, and do not plan to request, a ruling from the IRS on this or any other tax matter affecting us.

        If we were required to be treated as a corporation for U.S. federal income tax purposes, then we would pay U.S. federal income tax on our taxable income at the corporate tax rate which, under current law, is a maximum of 35%. We would also likely pay state and local income tax at varying rates. Distributions to you would generally be taxed again as either a dividend (to the extent of our current and accumulated earnings and profits) and/or as taxable gain after recovery of your U.S. federal income tax basis in your units, and no income, gains, losses, deductions or credits would flow through to you. Because a U.S. federal income tax would be imposed upon us as a corporation, our cash available for distribution to you would be substantially reduced. Thus, treatment of us as a corporation would result in a material reduction in the anticipated cash flow and after-tax return to you, likely causing a substantial reduction in the value of our common units.

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        Moreover, we intend to conduct a portion of our operations and business through one or more direct and indirect subsidiaries, one or more of which may be organized and taxable as a corporation for U.S. federal income tax purposes. Thus, even if we will not constitute a corporation for U.S. federal income tax purposes, if any of our direct or indirect subsidiaries will constitute a corporation for U.S. federal income tax purposes, then this could also reduce the amount of cash that might otherwise potentially be available for distribution to you. As Lehigh Gas Wholesale Services, Inc. will constitute a corporation for U.S. federal, state and local income tax purposes that will be subject to entity-level U.S. federal, state and local tax on its taxable income and gain currently anticipated to be mostly associated with the leasing of certain personal property, the amount of cash that Lehigh Gas Wholesale Services, Inc. will have available to distribute to us and, thus, the amount of cash that we will then have available to distribute to you would be reduced. Furthermore, if, for example, the IRS were to successfully assert that any direct or indirect corporate subsidiary of ours has more tax liability than we anticipate or legislation were enacted that increased the U.S. federal, state and/or local corporate tax rate, our cash available for distribution to you would be further reduced.

        In addition, changes in current state and/or local law may subject us to additional entity-level taxation by individual states and/or localities. For example, because of widespread state and local government budget deficits, several states and localities are evaluating ways to subject partnerships to entity-level taxation through the imposition of state and/or local income, franchise and/or other forms of taxation. If any state or locality were to impose a tax upon us as an entity, our cash available for distribution to you would be reduced.

         A significant amount of our income is expected to be attributable to our leasing of real property to LGO. If Lehigh Gas-Ohio Holdings LLC, or "LGO Holdings," a Delaware limited liability company and the sole member of LGO, were to become related to us for federal income tax purposes, real property rent received from LGO would no longer constitute "qualifying income" and we would likely be treated as a corporation for U.S. federal income tax purposes.

        We expect that a significant amount of our "qualifying income" will be comprised of real property rents from LGO attributable to the 182 sites that LGO will lease from us following this offering. In general, any real property rents that we receive from a tenant or sub-tenant of ours in which we, directly or indirectly, own or are treated as owning by reason of the application of certain "constructive ownership" rules at least: (a) 10% of such tenant's or sub-tenant's stock (voting power or value) in the case where such tenant or sub-tenant is a corporation for U.S. federal income tax purposes, or (b) an interest of at least 10% of such tenant's or sub-tenant's assets or net profits in the case where such tenant or sub-tenant is not a corporation for U.S. federal income tax purposes (as would be the case with respect to LGO), would not constitute "qualifying income." Upon the consummation of this offering, after applying certain constructive ownership rules, we will be treated as owning the 5% interest in the assets and net profits of LGO Holdings that Joseph V. Topper, Jr. and John B. Reilly, III will actually and constructively own. If we were considered to own 10% or more of the assets or net profits of LGO Holdings, then the real property rents that we receive from LGO would no longer constitute "qualifying income" in which case, based on our current operations, we would likely no longer qualify to be treated as a "partnership" (and instead would be treated as a corporation) for U.S. federal income tax purposes.

        Our and LGO Holdings' governing documents contain transfer restrictions designed to prevent us from being treated as owning by reason of the application of the "constructive ownership" rules at least 10% of LGO Holdings' assets or net profits. We have received an opinion of counsel that, subject to certain customary exceptions, such transfer restrictions are

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enforceable under Delaware law, but a court could determine that these restrictions are inapplicable or unenforceable. Please read "Material U.S. Material Consequences—Partnership Status."

         The U.S. federal (and/or state or local) income tax treatment of publicly traded partnerships or an investment in our common units could be subject to potential legislative, judicial or administrative changes and differing interpretations, possibly on a retroactive basis.

        The present U.S. federal (and/or state or local) income tax treatment of publicly traded partnerships, including us, or an investment in our common units may be modified by administrative, legislative or judicial changes or differing interpretation at any time. For example, members of Congress have recently considered substantive changes to the existing U.S. federal income tax laws that would affect certain publicly traded partnerships. Any modification to the U.S. federal income tax laws and interpretations thereof may or may not be applied retroactively and could make it more difficult or impossible to meet the "qualifying income" exception for us to be treated as a partnership for U.S. federal income tax purposes, affect or cause us to change our business activities, affect the tax considerations of an investment in us, change the character or treatment of portions of our income or gain and adversely affect an investment in our common units. Although the considered legislation would not appear to affect our treatment as a partnership for U.S. federal income tax purposes, we are unable to predict whether any of these changes, or other proposals, will ultimately be enacted. Any such changes could negatively impact the value of an investment in our common units.

        Our partnership agreement provides that if a law is enacted or existing law is modified or interpreted in a manner that results in us becoming subject to either: (a) entity-level taxation for U.S. federal, state, local and/or foreign income and/or withholding tax purposes to which we were not subject prior to such enactment, modification or interpretation, and/or (b) an increased amount of any such one or more of such taxes (including as a result of an increase in tax rates), then the minimum quarterly distribution amounts and the target distribution amounts may be adjusted (i.e., reduced) to reflect the impact of that law on us.

        If the IRS contests the U.S. federal income tax positions we take, the market for our common units may be adversely impacted, and the costs of any contest will reduce our cash available for distribution to you.

        We have not requested any ruling from the IRS with respect to our treatment as a partnership for U.S. federal income tax purposes or any other matter affecting us. The IRS may adopt positions that differ from our counsel's conclusions expressed in this prospectus or the positions we take. It may be necessary to resort to administrative or court proceedings to sustain some or all of our counsel's conclusions or the positions we take. A court may not agree with some or all of our counsel's conclusions or the positions we take. Any contest with the IRS may materially and adversely impact the market for our common units and the price at which they trade. In addition, the costs of any contest with the IRS, which will be borne indirectly by our unitholders and our general partner, will result in a reduction in cash available for distribution.

         You may be required to pay taxes on income from us even if you do not receive any cash distributions from us.

        Because you will be treated for U.S. federal income tax purposes as a partner in us, we will allocate a share of our taxable income and gain to you which could be different in amount than the cash we distribute to you. Thus, you may be required to pay U.S. federal income taxes and,

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in some cases, state and local taxes, on your allocable share of our taxable income and gain even if you do not receive any cash distributions from us.

         Tax gain or loss on sale or other taxable disposition of common units could be more or less than the cash that you may receive in such sale or other taxable disposition.

        If you sell (or otherwise dispose in a taxable disposition) one or more, or all, of your common units, you will recognize a gain or loss for U.S. federal income tax purposes equal to the difference between your amount realized in such sale or other taxable disposition and your U.S. federal income tax basis in those common units. Because distributions that you receive and the aggregate of our losses and deductions that are allocated to you in excess of your allocable share of the aggregate of our income and gain result in a net reduction in your U.S. federal income tax basis in your common units, the amount, if any, of such prior excess distributions and loss and deduction allocations with respect to the common units sold (or otherwise disposed of in a taxable disposition) will, in effect, become taxable income and/or gain to you if you sell (or otherwise dispose in a taxable disposition) your common units at a price greater than your U.S. federal income tax basis in those common units, even if the price you receive is less than or equal to their original cost. Furthermore, for U.S. federal income tax purposes a substantial portion of the amount realized, whether or not representing gain, may be taxed as ordinary income due to potential recapture of depreciation deductions and other recapture items. In addition, because a unitholder's amount realized would include his, her or its share of our nonrecourse liabilities, if you were to sell your units (or otherwise dispose of your units in a taxable disposition), you may incur a tax liability in excess of the amount of cash you receive from the sale or other taxable disposition. Please read "Material U.S. Federal Income Tax Consequences—Disposition of Common Units—Recognition of Gain or Loss."

         Tax-exempt organizations and non-U.S. persons face unique tax issues from owning common units that may result in adverse tax consequences to them.

        Investment in our common units by an organization that is exempt from U.S. federal income tax, or a "tax-exempt organization," such as employee benefit plans, individual retirement accounts, which we refer to as "IRAs," and non-U.S. persons raises issues unique to them. For example, a substantial amount (if not most) of our U.S. federal taxable income and gain would constitute gross income from an "unrelated trade or business" and the amount thereof allocable to a tax-exempt organization would be taxable to such organization as unrelated business taxable income. Distributions to a non-U.S. person that holds our common units will be reduced by U.S. federal withholding taxes imposed at the highest applicable U.S. federal income tax rate and such non-U.S. person will be required to file U.S. federal income tax returns and pay U.S. federal income tax, to the extent not previously withheld, on his, her or its allocable share of our taxable income and gain. If you are a tax-exempt organization or a non-U.S. person, you should consult your tax advisor before investing in our common units.

         You will likely be subject to state and local income taxes and return filing requirements in states and localities where you do not live as a result of investing in our common units.

        In addition to U.S. federal income taxes, you will likely be subject to other taxes, such as foreign, state and local income taxes, unincorporated business taxes and estate, inheritance or intangible taxes that are imposed by the various jurisdictions in which we do business or own property, even if you do not live in any of those jurisdictions. You will likely be required to file state and local income tax returns and pay state and local income taxes in some or all of these various jurisdictions. Further, you may be subject to penalties for failure to comply with those requirements. We initially expect to conduct business in Pennsylvania, New Jersey, Ohio, New York, Massachusetts, Kentucky, New Hampshire and Maine. Each of these states, currently

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imposes a personal income tax on individuals (except that New Hampshire only imposes a personal income tax on interest, dividends and gambling winnings) as well as an income, business profits and/or a franchise tax on corporations and other entities. We may own property or conduct business in other states, localities or foreign countries in the future. It is your responsibility to file all U.S. federal, state, local and foreign tax returns. Our counsel has not rendered an opinion on the state, local or non U.S. tax consequences of an investment in our common units.

         We will treat each purchaser of our common units as having the same tax benefits without regard to the actual common units purchased. The IRS may challenge this treatment, which could adversely affect the value of the common units.

        Because we cannot match transferors and transferees of common units, we will adopt depreciation and amortization positions that may not conform to all aspects of existing Treasury Regulations. A successful IRS challenge to those positions could adversely affect the amount of U.S. federal income tax benefits available to you. Our counsel is unable to opine as to the validity of such filing positions. It also could affect the timing of these tax benefits or the amount of gain for U.S. federal income tax purposes from your sale of common units and could have a negative impact on the value of our common units or result in audit adjustments to your U.S. federal income tax returns. See "Material U.S. Federal Income Tax Consequences—Tax Consequences of Unit Ownership—Section 754 Election" for a further discussion of the effect of the depreciation and amortization positions we adopt.

         We prorate our items of income, gain, loss and deduction for U.S. federal income tax purposes, and allocate them, between transferors and transferees (and the other holders) of our common units each month based upon the ownership of our common units on the first business day of each month and as of the opening of the applicable exchange on which our common units are listed, instead of on the basis of the date a particular common unit is transferred. The IRS may challenge this treatment, which could change the allocation of items of income, gain, loss and deduction among our unitholders.

        We generally prorate our items of income, gain, loss and deduction for U.S. federal income tax purposes between transferors and transferees of our common units each month based upon the ownership of our common units on the first day of each month, instead of on the basis of the date a particular common unit is transferred. The use of this proration method may not be permitted under existing Treasury Regulations. Recently, the U.S. Treasury Department issued proposed Treasury Regulations that provide a safe harbor pursuant to which publicly traded partnerships may use a similar monthly simplifying convention to allocate tax items among transferor and transferee unitholders. Nonetheless, the proposed Treasury Regulations are not final and do not specifically authorize the use of the proration method we have adopted. If the IRS were to challenge our proration method or new Treasury Regulations were to be issued, we may be required to change the allocation of items of income, gain, loss and deduction among our unitholders.

         If you loan your common units to a "short seller" to cover a short sale of common units, you may be considered to have disposed of those common units for U.S. federal income tax purposes. If so, you would no longer be treated for U.S. federal income tax purposes as a partner with respect to those common units during the period of the loan and you may recognize gain or loss from such deemed disposition.

        During the period of the loan of your common units to the short seller, any of our income, gain, loss or deduction with respect to such common units may not be reportable by you and any cash distributions received by you as to those common units could be fully taxable to you as ordinary income. Our counsel has not rendered an opinion regarding the treatment of a unitholder where common units are loaned to a short seller to cover a short sale of common units. Thus, unitholders should consult their tax advisors regarding the U.S. federal income tax effect of loaning their common units to a short seller.

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         We have adopted certain valuation methodologies for U.S. federal income tax purposes that may result in a shift of income, gain, loss and deduction between our general partner and our unitholders. The IRS may challenge this treatment, which could adversely affect the value of the common units.

        When we issue additional units or engage in certain other transactions, our general partner will determine the fair market value of our assets and allocate any unrealized gain or loss attributable to our assets to the capital accounts of our unitholders and our general partner. Although we may from time to time consult with professional appraisers regarding valuation matters, including the valuation of our assets, our general partner will make many (and possibly all) of the fair market value determinations of our assets (including by using a method based on the market value of our common units as a means to measure such fair market value(s)). The IRS may challenge any one or more of such determinations, or our allocation of the adjustment under Section 743(b) of the U.S. Internal Revenue Code of 1986, as amended, or the Code, attributable to our various assets, and allocations of income, gain, loss and deduction between our general partner and certain of our unitholders.

        A successful IRS challenge to these methods or allocations could adversely affect the amount of taxable income, gain or loss being allocated to our unitholders for U.S. federal income tax purposes. It also could affect the amount of taxable gain from our unitholders' sale of common units and could have a negative impact on the value of the common units or result in audit adjustments to our unitholders' U.S. federal income tax returns without the benefit of additional deductions.

         The sale or exchange of 50% or more of the total interest in our capital and profits within a twelve-month period will result in the termination of our partnership for U.S. federal income tax purposes.

        We will be considered to have technically terminated as a partnership for U.S. federal income tax purposes if there is a sale or exchange of 50% or more of the total interest in our capital and profits within a twelve-month period. For purposes of determining whether a technical tax termination has occurred, a sale or exchange of 50% or more of the total interests in our capital and profits could occur if, for example, the Topper Group, which will own collectively 50% or more of the total interest in our capital and profits after the consummation of this offering, were to sell or exchange their collective interest in us within a period of twelve months. For purposes of determining whether the 50% threshold has been met, multiple sales of the same interest will be counted only once. Our technical termination would, among other things, result in the closing of our taxable year for all unitholders, which could result in us filing two U.S. federal income tax returns (and unitholders receiving two Schedule K-1s) for one calendar year. However, pursuant to an IRS relief procedure the IRS may allow, among other things, a constructively terminated partnership to provide a single Schedule K-1 for the calendar year in which a termination occurs. Our technical termination could also result in the re-starting of the recovery period for our assets (and, thus, result in a significant deferral of depreciation and amortization deductions allowable in computing our U.S. federal taxable income). In the case of a unitholder reporting on a taxable year other than a calendar year, the closing of our taxable year may also result in more than twelve months of our taxable income or loss being includable in his taxable income for the year of termination. Our technical termination, however, would not affect our classification as a partnership for U.S. federal income tax purposes but instead we would be treated as a new partnership for U.S. federal income tax purposes. If we were treated as a new partnership for U.S. federal income tax purposes, we would be required to make new tax elections and could be subject to penalties if we were unable to determine that a technical termination occurred. Please read "Material U.S. Federal Income Tax Consequences—Disposition of Units—Constructive Termination."

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USE OF PROCEEDS

        We expect the net proceeds from our sale of 6,000,000 common units in this offering, after deducting the underwriting discounts, the structuring fee and estimated offering expenses payable by us, will be approximately $105.6 million based on an assumed offering price of $20.00 per common unit. We base this amount on an assumed initial public offering price of $20.00 per common unit and no exercise of the underwriters' option to purchase additional common units. An increase or decrease in the initial public offering price of $1.00 per common unit would cause the net proceeds from the offering, after deducting the underwriting discount, structuring fee and offering expenses payable by us, to increase or decrease by approximately $5.6 million.

        We intend to use the net proceeds from this offering:

    to repay $57.9 million of indebtedness outstanding under the new credit facility, which will be drawn upon at the completion of this offering in order to repay in full our existing credit agreement;

    to repay in full $14.3 million aggregate principal amount in outstanding mortgage notes;

    to pay $13.0 million to entities owned by adult children of Warren S. Kimber, Jr., a director of our general partner, as consideration for the cancellation of mandatorily redeemable preferred equity of our predecessor owned by these entities and to pay these entities for accrued but unpaid dividends on the mandatorily redeemable preferred equity ($0.4 million as of September 30, 2012);

    to distribute an aggregate $20.0 million cash to the Topper Group and LGC as reimbursement for certain capital expenditures made by the Topper Group and LGC with respect to the assets they contributed, and/or consideration for the purchase of all of the assets of one or more of the contributed entities; and

    to use for general partnership purposes, including working capital and acquisitions.

        Immediately following the completion of this offering, we expect to have available undrawn borrowing capacity of approximately $83.1 million under the new credit facility based on an assumed offering price of $20.00 per common unit (the midpoint of the price range set forth on the cover page of this prospectus). Borrowings under our existing revolving credit facility and term loan were primarily made in connection with our working capital needs and to finance acquisitions. As of June 30, 2012, we had borrowings outstanding of $164.5 million under our existing credit agreement, an aggregate of $14.3 million under mortgage notes and $12.0 million of mandatorily redeemable preferred equity. Indebtedness under the existing revolving credit facility and term loan bore interest at an average rate of approximately 3.2%, the mortgage notes bore interest at a weighted average rate of 4.0% and dividends were paid on the mandatorily redeemable preferred equity at a rate of 12% during the six months ended June 30, 2012. The existing credit agreement will mature on December 30, 2015, but will be amended and restated in connection with the offering, pursuant to which the term loan will be terminated and the existing credit facility will be repaid in full using the proceeds from the new credit agreement, consisting of a three-year $200 million senior secured credit facility which may be increased to $275 million if certain conditions are met. Please read "Management's Discussion and Analysis

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of Financial Condition and Results of Operations—Liquidity and Capital Resources—New Credit Agreement."

        We have granted the underwriters a 30-day option to purchase up to 900,000 additional common units. If the underwriters do not exercise their option to purchase additional common units, we will issue 900,000 common units to the Topper Group at the expiration of the 30-day option period. If and to the extent the underwriters exercise their option to purchase additional common units, the number of units purchased by the underwriters pursuant to any exercise will be sold to the public, and the remainder, if any will be issued to the Topper Group at the expiration of the option period. The exercise of the underwriters' option will not affect the total number of units outstanding or the amount of cash needed to pay the minimum quarterly distribution on all units. To the extent the underwriters exercise their option to purchase additional units, an amount equal to the net proceeds from the issuance and sale of those common units will be distributed to the Topper Group. We expect that the net proceeds received from the exercise of the underwriters' option to purchase additional common units in full after deducting the underwriting discounts and the structuring fee will be $16.7 million based on an assumed offering price of $20.00 per common unit (the midpoint of the price range set forth on the cover page of this prospectus).

        Raymond James Bank, N.A., an affiliate of Raymond James & Associates, Inc., will be a lender under our new credit facility. A portion of the net proceeds from this offering will be used either to repay the borrowings extended under the new credit facility or to reduce the amounts the lenders will initially fund to repay the existing credit facility.

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CAPITALIZATION

        The following table shows:

    the historical cash and cash equivalents and capitalization of our predecessor as of June 30, 2012; and

    our pro forma cash and cash equivalents and capitalization as of June 30, 2012 adjusted to reflect the offering of the common units, the application of the net proceeds from this offering as described under "Use of Proceeds" and the other transactions described under "Summary—The Transactions."

        This table is derived from, and should be read together with, the combined and pro forma combined financial statements and the accompanying notes included elsewhere in this prospectus. You should also read this table in conjunction with "Summary—The Transactions," "Use of Proceeds" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

 
  As of June 30, 2012  
 
  Our
Predecessor
Historical
 

  Lehigh Gas
Partners LP
Pro Forma
 
 
   
 
 
   
   
   
 
 
  (in thousands)
 

Cash and cash equivalents:

  $ 2,015       $ 1,517  
               

Debt (1):

                 

Revolving term loan, net of discount

  $ 164,465       $  

Credit facility (1)

            97,726  

Mortgage notes

    14,344          

Mandatorily redeemable preferred equity

    12,000          

Financing obligation

    77,376         71,210  
               

Total debt

  $ 268,185         168,936  
               

Equity:

                 

LGC and its subsidiaries and affiliates (Predecessor)

  $ (36,440 )        

Lehigh Gas Partners LP:

                 

Held by public:

                 

Common units

            105,600  

Held by the general partner and its affiliates:

                 

Common units

            (14,788 )

Subordinated units

            (72,970 )

General partner interest

             
               

Total equity (deficit)

  $ (36,440 )     $ 17,842  
               

Total capitalization (2)

  $ 231,745       $ 186,778  
               

(1)
In connection with the closing of this offering, we will enter into a new credit agreement consisting of a three-year, senior secured revolving credit facility in an aggregate principal amount of $200 million, which limit may be increased to $275 million if certain conditions are met. As of June 30, 2012, we had approximately $164.5 million of borrowings outstanding under our existing revolving credit facility and term loan. Please read "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—New Credit Agreement."

(2)
Each $1.00 increase (or decrease) in the assumed public offering price to $20.00 per common unit would decrease (or increase) total long-term debt, on a pro forma basis, by approximately $5.6 million, and increase (or decrease) total equity, on a pro forma basis, by $5.6 million, in each case after deducting the underwriting discounts, the structuring fee and estimated offering expenses. The information discussed above is illustrative only and will be adjusted based on the actual public offering price and other terms of this offering determined at pricing.

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DILUTION

        Dilution is the amount by which the offering price will exceed the net tangible book value per unit after the offering. Assuming an initial public offering price of $20.00 per common unit, after giving effect to the offering of common units and the related transactions, our net tangible book value was $3.2 million, or $0.22 per common unit. Purchasers of common units in this offering will experience substantial and immediate dilution in net tangible book value per common unit for financial accounting purposes, as illustrated in the following table.

Assumed initial public offering price per common unit

        $ 20.00  

Pro forma net tangible book value per common unit before the offering (1)

  $ (9.10 )      

Increase in net tangible book value per common unit attributable to purchasers in the offering

    9.32        
             

Less: Pro forma net tangible book value per common unit after the offering (2)

          0.22  
             

Immediate dilution in net tangible book value per common unit to purchasers in the offering

        $ 19.78  
             

(1)
Determined by dividing the number of units (1,525,000 common units and 7,525,000 subordinated units) to be issued to the general partner and its affiliates for their contribution of assets and liabilities to us into the net tangible book value of the contributed assets and liabilities as of June 30, 2012.

(2)
Determined by dividing the total number of units (7,525,000 common units and 7,525,000 subordinated units) to be outstanding after the offering into our pro forma net tangible book value, after giving effect to the application of the net proceeds of the offering, as of June 30, 2012.

        The following table sets forth the number of units that we will issue and the total consideration contributed to us by the Topper Group and LGC, in respect of their units and by the purchasers of common units in this offering upon consummation of the transactions contemplated by this prospectus.

 
  Units Acquired (1)   Total Consideration  
 
  Number   Percent   Amount   Percent  
 
   
   
  (dollars in thousands)
 

The Topper Group (2)(3)

    6,577,000     43.7 % $ (19,590 )   (109.8 )%

LGC (3)(4)

    2,473,000     16.4     (68,168 )   (382.1 )

Purchasers in this offering

    6,000,000     39.9     105,600     591.9  
                   

Total

    15,050,000     100.0 % $ 17,842     100.0 %
                   

(1)
The board of directors of our general partner has preliminarily determined to grant up to 500,000 phantom units under our long-term incentive plan to employees of LGC, other than the Chief Executive Officer of our general partner, within 180 days after the closing of this offering. Units acquired does not reflect the issuance of these phantom units.

(2)
Upon the consummation of the transactions contemplated by this prospectus, the Topper Group will own 1,525,000 common units and 5,052,000 subordinated units.

(3)
The assets contributed by the general partner and its affiliates were recorded at historical cost in accordance with GAAP. Book value of the consideration provided by our general partner and its affiliates, as of June 30, 2012, after giving effect to the cash distribution in the aggregate amount of $20.0 million to the Topper Group and LGC, was $17.8 million.

(4)
Upon the consummation of the transactions contemplated by this offering, LGC will own 2,473,000 subordinated units.

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CASH DISTRIBUTION POLICY AND RESTRICTIONS ON DISTRIBUTIONS

        You should read the following discussion of our cash distribution policy in conjunction with specific assumptions included in this section. In addition, you should read "Forward-Looking Statements" and "Risk Factors" for information regarding statements that do not relate strictly to historical or current facts and certain risks inherent in our business.

        For additional information regarding our combined and pro forma results of operations, you should refer to our audited and unaudited combined financial statements and unaudited pro forma condensed combined financial statements and the notes to those financial statements included elsewhere in this prospectus.

General

    Our Cash Distribution Policy

        The board of directors of our general partner has adopted a policy pursuant to which we will make cash distributions each quarter. The amount of cash distributed each quarter will be determined by the board of directors of our general partner following the end of such quarter. In general, we expect that cash distributed for each quarter will equal cash generated from operations less cash needed for maintenance capital expenditures, accrued but unpaid expenses, including the management fee to LGC, reimbursement of expenses incurred by our general partner, debt service and other contractual obligations and reserves for future operating and capital needs or for future distributions to our partners. We expect that the board of directors of our general partner will reserve excess cash, from time to time, including during the forecast period, in an effort to sustain or permit gradual or consistent increases in quarterly distributions. The board of directors of our general partner may also determine to borrow to fund distributions in quarters when we generate less cash available for distribution than necessary to sustain or grow our cash distributions per unit. The factors that we believe will be the primary drivers of our cash generated from operations are changes in demand for motor fuels, the number of sites to which we distribute motor fuels, the margin per gallon we are able to generate at such sites, and the numbers and profitability of sites we own and lease.

        Our initial cash distribution policy, established by our general partner, is to distribute each quarter an amount at least equal to the minimum quarterly distribution of $0.4375 per unit on all units ($1.75 per unit on an annualized basis). For each of the four quarters in the twelve months ending September 30, 2013, we forecast that our cash available for distribution will be sufficient to pay the minimum quarterly distribution of $0.4375 per unit on all of our common units and subordinated units. Please read "—Estimated Cash Available for Distribution." We do not expect that our cash distribution policy will change during the forecast period. Accordingly, we expect to make distributions in an amount at least equal to the minimum quarterly distribution during each quarter in the forecast period.

        Our general partner may determine at any time that it is in the best interest of our partnership to modify or revoke our cash distribution policy. Modification of our cash distribution policy may result in distributions of amounts less than, or greater than, our minimum quarterly distribution, and revocation of our cash distribution policy could result in no distributions at all. Please read "—General—Limitations on Cash Distribution Policy" for a further discussion of circumstances that may impact the amount of cash distributions we make.

        Although it is our intent to distribute each quarter an amount at least equal to the minimum quarterly distribution on all of our units, we are not obligated to make distributions in that

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amount or at all. However, with respect to any quarter during the subordination period, if we do not make quarterly distributions on our common units in an amount at least equal to the minimum quarterly distribution (plus any arrearages accumulated from prior periods), then the subordinated unitholders will not be entitled to receive any distributions until we have made distributions to common unitholders in an aggregate amount equal to the minimum quarterly distribution, plus all arrearages accumulated from prior periods. Please read "How We Make Distributions to Our Partners—Subordination Period." While our partnership agreement can be amended to change the amount specified as the minimum quarterly distribution, the amendment of that provision would not limit the discretion of the board of directors of our general partner to determine a policy regarding the payment of quarterly distributions and cannot be effected, during the subordination period, without the approval of the holders of a majority of our common units (excluding common units held by our general partner and its affiliates) and our subordinated units, voting as separate classes. Please read "The Partnership Agreement—Amendment of the Partnership Agreement." Accordingly, the rights of holders of common units to receive distributions prior to the payment of any distributions to the holders of subordinated units during the subordination period cannot be changed without the approval of the holders of a majority of our common units (excluding common units held by our general partner and its affiliates).

    Limitations on Cash Distributions and Our Ability to Change Our Cash Distribution Policy

        There is no guarantee that we will distribute quarterly cash distributions to our unitholders. We do not have a legal obligation to pay distributions at our minimum quarterly distribution rate or at any other rate. Uncertainties regarding future cash distributions to our unitholders include, among other things, the following factors:

    Our cash distribution policy is subject to restrictions on distributions under our new credit agreement. Our new credit agreement contains financial tests and covenants that we must satisfy. These financial tests and covenants are described in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—New Credit Agreement." Should we be unable to satisfy these restrictions or if we are otherwise in default under our new credit agreement, we would be prohibited from making cash distributions notwithstanding our cash distribution policy.

    Our general partner will have the authority to establish cash reserves for the prudent conduct of our business and for future cash distributions to our unitholders, and the establishment of or increase in those reserves could result in a reduction in cash distributions from levels we currently anticipate pursuant to our stated cash distribution policy. There is not a limit on the amount of cash reserves that our general partner may establish.

    Prior to making any distribution on the common units, we will pay LGC a management fee as further described in "Certain Relationships and Related Party Transactions—Agreements with Affiliates—Omnibus Agreement." In addition, we will reimburse our general partner and LGC for all out-of-pocket third-party expenses they incur and payments they make on our behalf. The payment of the management fee to LGC and the reimbursement of expenses, if any, to our general partner and LGC will reduce the amount of cash available to make distributions to our unitholders.

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    Even if our cash distribution policy is not modified or revoked, the amount of distributions we pay under our cash distribution policy and the decision to make any distribution is determined by our general partner.

    Under Section 17-607 of the Delaware Act, we may not make a distribution if the distribution would cause our liabilities to exceed the fair value of our assets.

    We may lack sufficient cash to pay distributions to our unitholders due to cash flow shortfalls attributable to a number of operational, commercial or other factors as well as increases in our operating or selling, general and administrative expenses, principal and interest payments on our outstanding debt, tax expenses, working capital requirements and anticipated cash needs.

    If we make distributions out of capital surplus, as opposed to operating surplus, such distributions will result in a reduction in the minimum quarterly distribution and the target distribution levels. Please read "How We Make Distributions to Our Partners—Adjustment to the Minimum Quarterly Distribution and Target Distribution Levels." We do not anticipate that we will make any distributions from capital surplus.

    Our ability to make distributions to our unitholders depends on the performance of our subsidiaries and their ability to distribute cash to us. The ability of our subsidiaries to make distributions to us may be restricted by, among other things, the provisions of existing and future indebtedness, applicable state partnership and limited liability company laws and other laws and regulations.

    Our Ability to Grow is Dependent on Our Ability to Access External Expansion Capital

        We expect that we will rely primarily upon external financing sources, including commercial bank borrowings and the issuance of debt and equity securities, to fund any future expansion capital expenditures. To the extent we are unable to finance this growth externally, our cash distribution policy will significantly impair our ability to grow. In addition, if we distribute most of our cash available for distribution, our growth may not be as fast as businesses that reinvest all of their cash to expand ongoing operations. To the extent we issue additional units, the payment of distributions on those additional units may increase the risk that we will be unable to maintain or increase our per unit distribution level. There are no limitations in our partnership agreement or our new credit agreement on our ability to issue additional units, provided there is no event of default under the new credit agreement, including units ranking senior to the common units. The incurrence of additional commercial borrowings or other debt to finance our growth would result in increased interest expense, which in turn may impact the cash that we have available to distribute to our unitholders.

Minimum Quarterly Distribution

        Pursuant to our distribution policy, we intend upon completion of this offering to declare a minimum quarterly distribution of $0.4375 per unit per complete quarter, or $1.75 per unit per year, to be paid no later than 60 days after the end of each fiscal quarter. This equates to an aggregate cash distribution of approximately $6.6 million per quarter or $26.3 million per year, in each case based on the number of common units and subordinated units to be outstanding immediately after completion of this offering. Our ability to make cash distributions equal to the minimum quarterly distribution pursuant to our cash distribution policy will be subject to the factors described above under "—General—Limitations on Cash Distributions and Our Ability to Change Our Cash Distribution Policy."

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        The table below sets forth the common and subordinated units to be outstanding upon the closing of this offering and the aggregate distribution amounts payable on such interests based on our minimum quarterly distribution of $0.4375 per unit per quarter, or $1.75 per unit on an annualized basis.

 
   
  Total Consideration  
 
  Number of
Units
 
 
  One Quarter   Annualized  

Publicly held common units

    6,000,000   $ 2,625,000   $ 10,500,000  

Common units held by the Topper Group

    1,525,000     667,188     2,668,750  

Subordinated units held by the Topper Group and LGC

    7,525,000     3,292,187     13,168,750  

Non-economic general partner interest (1)

             
               

Total

    15,050,000   $ 6,584,375   $ 26,337,500  
               

(1)
Our general partner owns a non-economic general partner interest in us.

        The board of directors of our general partner has preliminarily determined to grant up to 500,000 phantom units under our long-term incentive plan to employees of LGC, other than the Chief Executive Officer of our general partner, within 180 days after the closing of this offering. The information shown in the table above does not reflect the 500,000 phantom units that are expected to be awarded under our long-term incentive plan.

        The preceding table assumes the underwriters have not exercised their option to purchase additional common units. If the underwriters do not exercise their option to purchase additional common units, we will issue 900,000 common units to the Topper Group at the expiration of the option period. If and to the extent the underwriters exercise their option to purchase additional common units, the number of units purchased by the underwriters pursuant to such exercise will be sold to the public and the remainder, if any, will be issued to the Topper Group. Accordingly, the exercise of the underwriters' option will not affect the total number of units outstanding or the amount of cash needed to pay the minimum quarterly distribution on all units. Please read "Underwriting."

        If the minimum quarterly distribution on our common units is not paid with respect to any quarter, the common unitholders will not be entitled to receive such payments in the future except that, during the subordination period, to the extent we distribute cash from operating surplus in any future quarter in excess of the amount necessary to make cash distributions to holders of our common units at the minimum quarterly distribution, we will use this excess cash to pay the arrearages related to prior quarters before any cash distribution is made to holders of subordinated units. See "How We Make Distributions to Our Partners—Subordination Period."

        The actual amount of our cash distributions for any quarter is subject to fluctuations based on, among other things, the amount of cash we generate from our business and the amount of reserves our general partner establishes.

        We expect to pay our quarterly distributions on or about the 15th day of each February, May, August and November to holders of record on or about the first day of each such month. If the distribution date does not fall on a business day, we will make the distribution on the business day immediately preceding the indicated distribution date. We will adjust the quarterly distribution for the period from the closing of this offering through December 31, 2012 based on the actual length of the period.

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Unaudited Pro Forma Cash Available for Distribution

        In the following table, we show our pro forma results of operations and the amount of cash available for distribution we would have had for the year ended December 31, 2011 and the twelve months ended June 30, 2012, based on our unaudited pro forma condensed combined statements of operations included elsewhere in this prospectus.

        Our unaudited pro forma combined financial statements are derived from the audited combined financial statements of our predecessor included elsewhere in this prospectus. Our unaudited pro forma condensed combined financial statements should be read together with "Selected Historical and Pro Forma Combined Financial and Operating Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the audited combined financial statements of our predecessor and the notes to those statements included elsewhere in this prospectus.

        The pro forma cash available for distribution generated during the year ended December 31, 2011 and the twelve months ended June 30, 2012 was $32.3 million and $27.6 million, respectively, and, as such, we would have generated cash available for distribution sufficient to pay the minimum quarterly distribution on all of our common units and subordinated units for those periods.

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Lehigh Gas Partners LP
Unaudited Pro Forma Cash Available for Distribution

 
  Pro Forma  
 
  Year Ended
December 31, 2011
  Twelve Months
Ended
June 30, 2012
 
 
  (dollars in thousands, except margin per gallon and per unit figures)
(unaudited)

 

Operating Data:

             

Sites owned and leased

    311     432  

Gallons of motor fuel distributed (in millions)

    561.7     592.4  

Margin per gallon (1)

  $ 0.0662   $ 0.0591  

Revenues:

             

Revenues from fuel sales

  $ 1,134,183   $ 1,040,892  

Revenues from fuel sales to affiliates

    659,488     688,405  

Rental income

    10,228     10,247  

Rental income from affiliates

    11,149     7,239  

Revenues from retail merchandise and other

    14      
           

Total revenues

    1,815,062     1,746,783  

Costs and operating expenses:

             

Cost of revenues from fuel sales

  $ 1,107,153   $ 1,016,435  

Cost of revenues from fuel sales to affiliates

    649,318     677,847  

Cost of revenues from retail merchandise and other

    2      

Rent expense

    7,259     7,600  

Operating expenses

    3,590     3,418  

Depreciation and amortization

    10,946     13,938  

Selling, general and administrative expense (2)

    9,190     10,675  

(Gain) on sale of assets

    (3,188 )   (4,529 )
           

Total costs and operating expenses

    1,784,270     1,725,384  
           

Operating income

    30,792     21,399  

Interest expense, net

    (6,861 )   (7,148 )

Other income, net

    984     1,612  
           

Income from continuing operations

    24,915     15,863  

Income tax expense from continuing operations

    300     200  
           

Net income from continuing operations

  $ 24,615   $ 15,663  
           

Plus:

             

Depreciation and amortization

    10,946     13,938  

Income tax expense from continuing operations

    300     200  

Interest expense

    6,861     7,148  
           

EBITDA (3)

  $ 42,722   $ 36,949  

Plus:

             

(Gain) loss on sale of assets

    (3,188 )   (4,529 )
           

Adjusted EBITDA (3)

  $ 39,534   $ 32,420  
           

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  Pro Forma  
 
  Year Ended
December 31, 2011
  Twelve Months
Ended
June 30, 2012
 
 
  (dollars in thousands, except margin per gallon and per unit figures)
(unaudited)

 

EBITDA (3)

  $ 42,722   $ 36,949  

Less:

             

Cash interest expense

    (6,907 )   (6,870 )

Principal payments on lease finance obligations

    (424 )   (310 )

Maintenance capital expenditures (4)

    (2,772 )   (2,017 )

Expansion capital expenditures (4)

    (33,749 )   (18,681 )

Income tax

    (300 )   (200 )

Plus:

             

Borrowings or cash on hand for expansion capital expenditures

    33,749     18,681  
           

Cash available for distribution:

  $ 32,319   $ 27,552  
           

Annualized minimum quarterly distribution per unit

  $ 1.75   $ 1.75  

Distribution to common unitholders

  $ 13,169   $ 13,169  

Distribution to subordinated unitholders

    13,169     13,169  

Distribution to general partner

         
           

Total distributions

  $ 26,338   $ 26,338  
           

Excess

  $ 5,981   $ 1,214  
           

(1)
Margin per gallon represents (a) total revenue from fuel sales, less total cost of revenue from fuel sales, divided by (b) total gallons of motor fuels distributed.

(2)
Includes the incurrence of estimated incremental expenses associated with being a publicly traded partnership of approximately $2.3 million, including costs associated with SEC reporting requirements, tax return and Schedule K-1 preparation and distribution, independent auditor fees, investor relations activities, Sarbanes-Oxley compliance, NYSE listing, registrar and transfer agent fees, incremental director and officer liability insurance and director compensation.

(3)
EBITDA and Adjusted EBITDA are defined in "Selected Historical and Pro Forma Combined Financial and Operating Data—Non-GAAP Financial Measures." We did not report net income (loss) on a pro forma basis for the year ended December 31, 2011 or the six months ended June 30, 2012. Accordingly, EBITDA and Adjusted EBITDA are calculated on the basis of net income (loss) from continuing operations for the periods presented on a pro forma basis.

(4)
Historically, our predecessor has not made a distinction between maintenance capital expenditures and expansion capital expenditures. Under our partnership agreement, maintenance capital expenditures are capital expenditures made to maintain our long-term operating income or operating capacity, while expansion capital expenditures are capital expenditures that we expect will increase our operating income or operating capacity over the long term. Examples of maintenance capital expenditures are those made to maintain existing contract volumes, including payments to renew existing distribution contracts, or to maintain our sites in leasable condition, such as parking lot or roof replacement/renovation, or to replace equipment required to operate our existing business. Examples of expansion capital expenditures are the acquisitions of new sites or the construction or expansion of convenience stores or carwashes at our sites.


For the year ended December 31, 2011, our pro forma capital expenditures totaled $36.5 million. We estimate that approximately $2.8 million of our pro forma capital expenditures were maintenance capital expenditures and approximately $33.7 million of our pro forma capital expenditures were expansion capital expenditures. Expansion capital expenditures for the year ended December 31, 2011 primarily consisted of investments associated with the acquisition of 26 Shell-branded locations acquired from Motiva Enterprises, LLC for $30.4 million in cash.


For the twelve months ended June 30, 2012, our pro forma capital expenditures totaled $20.7 million. We estimate approximately $2.0 million of our pro forma capital expenditures were maintenance capital expenditures and that $18.7 million of our pro forma capital expenditures were expansion capital expenditures. Expansion capital expenditures for the twelve months ended June 30, 2012 primarily consisted of expenses associated with the acquisition of the sites referenced above.

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Estimated Cash Available for Distribution

        The following table sets forth our calculation of estimated cash available for distribution to our unitholders and general partner for the twelve months ending September 30, 2013, which we refer to as the "forecast period," and for each of the four quarters in the twelve months ending September 30, 2013. We forecast that our cash available for distribution generated during the forecast period will be $31.6 million. This amount would be sufficient to pay the minimum quarterly distribution of $0.4375 per unit on all of our common units and subordinated units for each quarter in the twelve months ending September 30, 2013.

        We are providing the financial forecast to supplement our pro forma combined financial statements in support of our belief that we will have sufficient cash available to allow us to pay cash distributions on all of our common units and subordinated units for each quarter in the forecast period at the minimum quarterly distribution rate. Please read "—Significant Forecast Assumptions" for further information as to the assumptions we have made for the financial forecast. Please read "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies" for information as to the accounting policies we have followed for the financial forecast.

        Our forecast reflects our judgment as of the date of this prospectus of the conditions we expect to exist and the course of action we expect to take during the forecast period. We believe that our actual results of operations will approximate those reflected in our forecast, but we can give no assurance that our estimated results will be achieved. If our estimates are not achieved, we may not be able to pay distributions on our common units and subordinated units at the minimum quarterly distribution rate of $0.4375 per unit each quarter (or $1.75 per unit on an annualized basis) or any other rate. The assumptions and estimates underlying the forecast are inherently uncertain and, though we consider them reasonable as of the date of this prospectus, are subject to a wide variety of significant business, economic, and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the forecast, including, among others, risks and uncertainties contained in "Risk Factors." Accordingly, there can be no assurance that the forecast is indicative of our future performance or that actual results will not differ materially from those presented in the forecast. Inclusion of the forecast in this prospectus should not be regarded as a representation by any person that the results contained in the forecast will be achieved.

        We do not, as a matter of course, make public forecasts as to future sales, earnings or other results. However, we have prepared the following forecast to present the estimated cash available for distribution to our unitholders and general partner during the forecast period. The accompanying forecast was not prepared with a view toward complying with the guidelines established by the American Institute of Certified Public Accountants with respect to prospective financial information, but, in our view, was prepared on a reasonable basis, reflects the best currently available estimates and judgments, and presents, to the best of management's knowledge and belief, the expected course of action and our expected future financial performance. However, this information is not necessarily indicative of future results.

        Neither our independent auditors, nor any other independent accountants, have compiled, examined or performed any procedures with respect to the forecast contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the forecast.

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We do not undertake to release publicly after this offering any revisions or updates to the financial forecast or the assumptions on which our forecasted results of operations are based.

 
  Forecasted  
 
  Three Months Ending    
 
 
  December 31,
2012
  March 31,
2013
  June 30,
2013
  September 30,
2013
  Twelve Months
Ending
September 30,
2013
 
 
  (dollars in thousands, except per unit figures)
(unaudited)

 

Operating Data:

                               

Sites owned and leased

    432     432     432     432     432  

Gallons of motor fuel distributed (in millions)

    158.8     146.1     161.9     166.3     633.1  

Margin per gallon (1)

  $ 0.0659   $ 0.0664   $ 0.0660   $ 0.0658   $ 0.0660  

Revenues:

                               

Revenues from fuel sales

  $ 305,830   $ 280,039   $ 309,754   $ 315,423   $ 1,211,046  

Revenues from fuel sales to affiliates

    179,350     166,524     184,952     192,606     723,432  

Rental income

    3,586     3,606     3,615     3,619     14,426  

Rental income from affiliates

    3,132     3,100     3,134     3,189     12,555  
                       

Total revenues

    491,898     453,269     501,455     514,837     1,961,459  

Costs and operating expenses:

                               

Cost of revenues from fuel sales

    299,027     273,738     302,829     308,371     1,183,965  

Cost of revenues from fuel sales to affiliates

    175,696     163,120     181,187     188,711     708,714  

Rent expense

    2,855     2,930     3,212     3,410     12,407  

Operating expenses

    591     591     591     591     2,364  

Depreciation and amortization

    3,560     3,602     3,644     3,686     14,492  

Selling, general and administrative

    2,365     2,336     2,373     2,383     9,457  
                       

Total costs and operating expenses

    484,094     446,317     493,836     507,152     1,931,399  
                       

Operating income

    7,804     6,952     7,619     7,685     30,060  

Interest expense, net

    (2,189 )   (2,189 )   (2,188 )   (2,176 )   (8,742 )
                       

Income from continuing operations

    5,615     4,763     5,431     5,509     21,318  

Income tax

    19     19     19     19     76  
                       

Net income

    5,596     4,744     5,412     5,490     21,242  
                       

Plus:

                               

Depreciation and amortization

    3,560     3,602     3,644     3,686     14,492  

Income tax

    19     19     19     19     76  

Interest expense

    2,189     2,189     2,188     2,176     8,742  
                       

EBITDA (2)

    11,364     10,554     11,263     11,371     44,552  
                       

Less:

                               

Cash interest expense

    (2,044 )   (2,050 )   (2,055 )   (2,048 )   (8,197 )

Principal payments on debt and lease finance obligations

    (81 )   (250 )   (412 )   (464 )   (1,207 )

Maintenance capital expenditures (3)

    (875 )   (875 )   (875 )   (875 )   (3,500 )

Expansion capital expenditures (3)

    (450 )   (450 )   (450 )   (450 )   (1,800 )

Income tax

    (19 )   (19 )   (19 )   (19 )   (76 )

Plus:

                               

Borrowings or cash on hand for expansion capital expenditures

    450     450     450     450     1,800  
                       

Cash available for distribution

    8,345     7,360     7,902     7,965     31,572  
                       

Annualized minimum quarterly distribution per unit

  $ 0.4375   $ 0.4375   $ 0.4375   $ 0.4375   $ 1.7500  

Distribution to common unitholders

  $ 3,292   $ 3,292   $ 3,292   $ 3,293   $ 13,169  

Distribution to subordinated unitholders

    3,292     3,292     3,293     3,292     13,169  

Distribution to general partner

                     
                       

Total distributions

    6,584     6,584     6,585     6,585     26,338  
                       

Excess

  $ 1,761   $ 776   $ 1,317   $ 1,380   $ 5,234  
                       

(1)
Margin per gallon represents (a) total revenues from fuel sales, less total cost of revenues from fuel sales, divided by (b) total gallons of motor fuels distributed.

(2)
EBITDA is defined in "Selected Historical and Pro Forma Combined Financial and Operating Data—Non-GAAP Financial Measures."

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(3)
Historically, our predecessor has not made a distinction between maintenance capital expenditures and expansion capital expenditures. Under our partnership agreement, maintenance capital expenditures are capital expenditures made to maintain our long-term operating income or operating capacity, while expansion capital expenditures are capital expenditures that we expect will increase our operating income or operating capacity over the long term. Examples of maintenance capital expenditures are those made to maintain existing contract volumes, including payments to renew existing distribution contracts, or to maintain our sites in leasable condition, such as parking lot or roof replacement/renovation, or to replace equipment required to operate our existing business. Examples of expansion capital expenditures are the acquisitions of new sites or the construction or expansion of convenience stores or carwashes at our sites.

Significant Forecast Assumptions

        In this section, we present in detail the basis for our belief that we will be able to fully fund our minimum quarterly distribution of $0.4375 per unit for the forecast period with the significant assumptions upon which this forecast is based.

        The forecast has been prepared by and is the responsibility of our management. Our forecast reflects our judgment as of the date of this prospectus of conditions we expect to exist and the course of action we expect to take during the forecast period. While the assumptions disclosed in this prospectus are not all-inclusive, the assumptions listed below are those that we believe are material to our forecasted results of operations and any assumptions not discussed below were not deemed to be material. We believe we have a reasonable objective basis for these assumptions. We believe our actual results of operations will approximate those reflected in our forecast, but we can give no assurance that our forecasted results will be achieved. There likely will be differences between our forecast and the actual results, and those differences could be material. If our forecast is not achieved, we may not be able to pay cash distributions on our common units at the minimum distribution rate or at all.

    Revenues

        Our revenues consist of rental income collected from third parties and affiliates and the distribution of motor fuels to third parties and affiliates. We forecast that our total revenues for the forecast period will be $1,961.5 million, as compared to $1,815.1 million and $1,746.8 million, for the year ended December 31, 2011 and the twelve months ended June 30, 2012, respectively, each on a pro forma basis. We estimate we will distribute 633.1 million gallons of motor fuels for the forecast period, as compared to the 561.7 million gallons and 592.4 million gallons we distributed for the year ended December 31, 2011 and the twelve months ended June 30, 2012, respectively, each on a pro forma basis. This volume estimate is primarily based on the average historical volumes distributed per site to third parties or affiliates, or distributed directly by LGO, during the twelve months ended June 30, 2012 and additional volumes we expect to deliver to sites leased from Getty.

        We estimate that our rental income will be $27.0 million for the forecast period, as compared to $21.4 million and $17.5 million for the year ended December 31, 2011 and the twelve months ended June 30, 2012, respectively, each on a pro forma basis. This estimated rental income is based primarily on the expectation we will own or lease 432 sites during the forecast period as compared to the 311 sites and 432 sites we owned and leased during the year ended December 31, 2011 and the twelve months ended June 30, 2012, respectively, each on a pro forma basis.

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        In May 2012, we entered into master lease agreements to lease an aggregate of 120 sites from an affiliate of Getty. Of the 120 sites, 74 are located in Massachusetts, 22 are located in New Hampshire, 15 are located in Pennsylvania and nine are located in Maine. Currently, seven sites are subleased to lessee dealers, 98 sites are subleased to and operated by LGO, and 15 sites are closed. We are converting a significant portion of the sites that are subleased to and operated by LGO to lessee dealer-operated sites. Upon their conversion to lessee dealer operations, we will begin to distribute motor fuels to these sites and will collect rental income from the lessee dealers that operate them. Until these sites are converted, we will distribute motor fuels to LGO for sale at these sites, LGO will operate the sites and we will collect rental income from LGO.

        Our revenue forecast is based primarily on the following assumptions:

    Revenues from Fuel Sales. We estimate that we will distribute 395.7 million gallons of motor fuels to third parties during the forecast period. This volume estimate is based primarily on the average historical volumes distributed per site to third parties, or 316.8 million gallons for the twelve months ended June 30, 2012, and the volume of motor fuels we estimate for distribution to Getty sites we expect to be operated by lessee dealers. The forecast includes 65 sites we currently lease from Getty, reflected in our operating results beginning in May 2012. After re-positioning the Getty sites, we forecast distributing 47.4 million gallons of motor fuels in the forecast period to Getty sites operated by lessee dealers.

    We estimate the margin per gallon for motor fuels we distribute to third parties, other than sites leased from Getty, whether fixed or variable, will not differ substantially for the forecast period, as compared to the twelve months ended June 30, 2012. We estimate the margin per gallon we expect to earn on motor fuels distributed to Getty sites we expect to be operated by lessee dealers based on margin per gallon we have experienced at our similarly positioned sites operated by lessee dealers. Based on our volume and margin per gallon estimates for the forecast period, we estimate that our motor fuel distribution revenues from fuel sales to third-parties will be $1,211.0 million for the forecast period, as compared to $1,134.2 million and $1,040.9 million for the year ended December 31, 2011 and the twelve months ended June 30, 2012, respectively, each on a pro forma basis.

    Revenues from Fuel Sales to Affiliates. We estimate we will distribute 237.4 million gallons of motor fuels to our affiliates for the forecast period. This volume estimate is based primarily on the average historical volumes distributed per site to our affiliates, or 275.6 million gallons during the twelve months ended June 30, 2012. We expect to complete the re-positioning of the Getty sites during the forecast period. We forecast distributing 24.9 million gallons of motor fuels to Getty sites operated by LGO during the forecast period. In our forecast for the volume of motor fuels to be distributed during the forecast period, the volume we expect to distribute to the Getty sites is offset by the loss of 38.0 million gallons previously distributed to affiliate sites located on the Ohio Turnpike, for which our lease expired on December 31, 2011.

    We estimate the margin per gallon of motor fuels we distribute to affiliates, whether fixed or variable, will not be substantially different for the forecast period than our actual margin per gallon for fuel sales to affiliates during the twelve months ended June 30, 2012. Our margin per gallon estimates for the forecast period are based on our estimates of the margin per gallon we expect to earn on motor fuels distributed to Getty sites operated by LGO. Our estimates of the margin per gallon of motor fuels distributed to the Getty sites are based on margin per gallon we have experienced at similarly positioned sites also operated by LGO or commission agents. Based on our volume and margin per gallon estimates for the forecast period, we forecast our motor fuel

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      distribution revenues from fuel sales to affiliates will be $723.4 million for the forecast period, as compared to $659.5 million and $688.4 million for the year ended December 31, 2011 and the twelve months ended June 30, 2012, respectively, each on a pro forma basis.

    Rental Income. Our forecast for rental income is based primarily on our current rental income by site. For new sites, including the Getty sites, we estimate rental income based on our experience with sites that are similar in size and location. We estimate our rental income will be $14.4 million for the forecast period, as compared to $10.2 million for each of the year ended December 31, 2011 and the twelve months ended June 30, 2012, respectively, each on a pro forma basis. This estimated rental income is based primarily on the expectation that we will own or lease 203 sites that we will, in turn, lease or sub-lease during the forecast period. The forecast includes $2.9 million in rental income we expect to earn from 65 Getty sites we expect to sub-lease to lessee dealers.

    Rental Income from Affiliates. Rental income from affiliates is forecast to be generated primarily from sites leased from us, and operated by, LGO. We seek to facilitate fuel sales at the sites at favorable margins per gallon in an effort to maximize the overall profitability to us from the sites. Our forecast of rental income reflects this effort. For newly acquired sites, we estimate rental income from affiliates based on our experience with sites that are similar in size and location, taking into account our expectations for the distribution of motor fuel to the sites and our efforts to maximize the overall profitability of the sites. We estimate that our rental income from affiliates will be $12.6 million for the forecast period, as compared to $11.1 million and $7.2 million for the year ended December 31, 2011 and the twelve months ended June 30, 2012, respectively, each on a pro forma basis. This estimated rental income from affiliates is based primarily on the expectation that we will own or lease 212 sites that we, in turn, will lease to affiliates during the forecast period. The forecast includes $1.2 million in rental income that we expect to earn from 40 Getty sites that we expect to sub-lease to LGO.

    Costs and Operating Expenses

        Our costs and operating expenses primarily include the cost of revenues from fuel sales, property lease expenses, rent expense, operating expenses, depreciation and amortization expenses, and selling, general and administrative expenses. We forecast our costs and operating expenses will be $1,931.4 million for the forecast period, as compared to $1,784.3 million and $1,725.3 million for the year ended December 31, 2011 and the twelve months ended June 30, 2012, respectively, each on a pro forma basis. Our estimates are based on our historical costs and operating expenses for each site. For newly acquired sites, our estimates are based on our experience with sites that are similar in size and location. Our forecast of costs and operating expenses are based on the following assumptions:

    Cost of Revenues from Fuel Sales. We forecast that our cost of revenues from motor fuel distribution operations for the forecast period will be $1,184.0 million, as compared to $1,107.2 million and $1,016.4 million for the year ended December 31, 2011 and the twelve months ended June 30, 2012, respectively, each on a pro forma basis. Our forecast is based on historical costs and operating expenses per gallon of motor fuels distributed and our estimate that we will distribute 633.1 million gallons during the forecast period. The forecast includes 47.4 million gallons of motor fuels that we expect to distribute to lessee dealers at Getty sites. The increase in cost of revenues is based on the gallons that we expect to distribute to the 65 sites that we lease from Getty that are reflected in our operating results starting in May 2012, offset by a reduction in the cost of revenues

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      attributable to distribution to sites located on the Ohio Turnpike for which our lease expired on December 31, 2011.

    Cost of Revenues from Fuel Sales to Affiliates. We forecast that our cost of revenues from fuel sales to affiliates for the forecast period will be $708.7 million, as compared to $649.3 million and $677.8 million for the year ended December 31, 2011 and the twelve months ended June 30, 2012, respectively, each on a pro forma basis. Our forecast is based on historical costs per gallon of motor fuels distributed and our estimate that we will distribute 237.4 million gallons of motor fuels to affiliates for the forecast period. The forecast includes 24.9 million gallons of motor fuels that we expect to distribute to LGO at Getty sites. The increase in cost of revenues from fuel sales to affiliates is based on the distribution that we expect to undertake to LGO with respect to the 40 sites that we lease from Getty.

    Rent Expense. Our rent expense consists of lease payments to landlords for sites that we lease and, in turn, sub-lease to lessee dealers and LGO. We forecast that our rent expense will be $12.4 million for the forecast period, as compared to $7.3 million and $7.6 million for the year ended December 31, 2011 and the twelve months ended June 30, 2012, respectively, each on a pro forma basis. Our rent expense forecast is based on the expectation that we will lease 214 sites during the forecast period. The forecast includes $3.3 million in rent expense for the 120 sites we lease from Getty.

    Operating Expenses. Our operating expenses consist primarily of expenses related to our real estate operations, including repairs and maintenance and real estate taxes. We estimate operating expenses for the forecast period will be $2.4 million, as compared to $3.6 million and $3.4 million for the year ended December 31, 2011 and the twelve months ended June 30, 2012, respectively, each on a pro forma basis. Our forecast of operating expenses is based primarily on the number of sites we expect to own and lease during the forecast period and our experience with comparable sites.

        Depreciation and Amortization. We forecast that our depreciation and amortization expenses will be $14.5 million for the forecast period, as compared to $10.9 million and $13.9 million for the year ended December 31, 2011 and the twelve months ended June 30, 2012, respectively, each on a pro forma basis. Our forecast of depreciation and amortization expenses is based primarily on our average depreciable asset lives and depreciation methodologies, taking into account forecasted capital expenditures described below. We have assumed that the average depreciable asset lives are 17 years for buildings and seven years for equipment.

        Selling, General and Administrative. We forecast that our selling, general and administrative expenses will be $9.5 million for the forecast period, as compared to $9.2 million and $10.7 million for the year ended December 31, 2011 and the twelve months ended June 30, 2012, respectively, each on a pro forma basis. The forecasted selling, general and administrative expenses reflects the management fee to be paid to LGC, which shall initially be an amount equal to (1) $420,000 per month plus (2) $0.0025 for each gallon of motor fuels we distribute per month, and $2.3 million of other costs and expenses associated with being a public company, such as director compensation, director and officer insurance, NYSE listing fees, and transfer agent fees.

        Interest. We forecast that our interest expense will be $8.7 million for the forecast period, as compared to $6.9 million and $7.1 million for the year ended December 31, 2011 and the twelve months ended June 30, 2012, respectively, each on a pro forma basis. Our total debt balance as

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of June 30, 2012, on a pro forma basis, was $168.9 million. Our interest expense for the forecast period is based on the following assumptions:

    our outstanding indebtedness will be reduced by approximately $72.2 million after application of a portion of the net proceeds from this offering; and

    in calculating our interest rate exposure, we have assumed an average interest rate of 3.00% for the forecast period, as compared to an average interest rate of 3.3% and 3.3% for the year ended December 31, 2011 and the twelve months ended June 30, 2012, respectively, each on a pro forma basis.

        Capital Expenditures. We forecast that our capital expenditures will be $5.3 million for the forecast period, as compared to $36.5 million and $20.7 million for the year ended December 31, 2011 and the twelve months ended June 30, 2012, respectively, each on a pro forma basis. We forecast that our maintenance capital expenditures will be $3.5 million for the forecast period, as compared to $2.8 million and $2.0 million of maintenance capital expenditures for the year ended December 31, 2011 and the twelve months ended June 30, 2012, respectively, each on a pro forma basis. Our maintenance capital expenditures in 2011 are not expected to recur in the forecast period. We expect to fund maintenance capital expenditures from cash generated by our operations. We forecast that our expansion capital expenditures will be $1.8 million for the forecast period, as compared to $33.7 million and $18.7 million for the year ended December 31, 2011 and the twelve months ended June 30, 2012, respectively, each on a pro forma basis. The forecasted expansion capital expenditures during the forecast period reflect our obligation to invest in the sites we lease from Getty. We plan to grow through acquisitions, which would increase our expansion capital expenditures, though our forecast does not include any specific acquisition activity.

        Regulatory, Industry and Economic Factors. We forecast our results of operations for the forecast period based on the following assumptions related to regulatory, industry and economic factors:

    no material nonperformance or credit-related defaults by suppliers, dealers, lessees or sub-wholesalers;

    no new federal, state or local regulation of the portions of the motor fuels industry in which we operate or any interpretation of existing regulation that in either case will be materially adverse to our business;

    no material adverse effects to our business or industry on account of natural disasters;

    no major adverse change resulting from supply disruptions or reduced demand for motor fuels; and

    no material changes to market, regulatory and overall economic conditions.

        Actual results could vary significantly from the foregoing assumptions if there are substantial changes in the demand for motor fuels, including, but not limited to, decreases in demand for motor fuels resulting from increases in the price of motor fuels, if a number of our customers are unable to satisfy their contractual obligations, if we divest some of our properties or fail to acquire new properties, if the margin we charge on motor fuels we distribute changes substantially, if we are not able to enter into new or amend our current supply agreements in order to meet any increased demand for motor fuels and service any newly acquired sites. Please read "Risk Factors—Risks Inherent in Our Business—The assumptions underlying the forecast of cash available for distribution that we include in "Cash Distribution Policy and Restrictions on Distributions" are inherently uncertain and subject to significant business, economic, financial, regulatory and competitive risks and uncertainties that could cause our actual cash available for distribution to differ materially from our forecast.

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HOW WE MAKE DISTRIBUTIONS TO OUR PARTNERS

General

        Within 60 days after the end of each quarter, beginning with the quarter ending December 31, 2012, we intend to make cash distributions to unitholders of record on the applicable record date. We will adjust the minimum quarterly distribution for the period from the closing of the offering through December 31, 2012. We intend to distribute to the holders of common units and subordinated units on a quarterly basis at least the minimum quarterly distribution of $0.4375 per unit, or $1.75 per unit per year, to the extent we have sufficient cash available for distribution.

        Our partnership agreement does not contain a requirement for us to pay distributions, whether in the form of cash or equity, to our unitholders. However, it does contain provisions intended to motivate our general partner to make steady, increasing and sustainable distributions over time. See "Cash Distribution Policy and Restrictions on Distributions—General—Our Cash Distribution Policy."

Operating Surplus and Capital Surplus

    General

        Any distributions we make will be characterized as made from "operating surplus" or "capital surplus." Distributions from operating surplus are made differently than we would distribute cash from capital surplus. Operating surplus distributions will be made to our unitholders and, if we make quarterly distributions above the first target distribution level described below, to the holder of our incentive distribution rights. We do not anticipate that we will make any distributions from capital surplus. In such an event, however, any capital surplus distribution would be made pro rata to all unitholders, but the holder of the incentive distribution rights would generally not participate in any capital surplus distributions with respect to those rights.

    Operating Surplus

        We define operating surplus as:

    $15 million (as described below); plus

    all of our cash receipts after the closing of this offering, excluding cash from interim capital transactions (as defined below) provided that cash receipts from the termination of a commodity hedge or interest rate hedge prior to its specified termination date shall be included in operating surplus in equal quarterly installments over the remaining scheduled life of such commodity hedge or interest rate hedge; plus

    working capital borrowings made after the end of a period but on or before the date of determination of operating surplus for the period; plus

    cash distributions paid in respect of equity issued (including incremental distributions on incentive distribution rights), other than equity issued in this offering, to finance all or a portion of expansion capital expenditures in respect of the period from such financing until the earlier to occur of the date the capital asset commences commercial service and the date that it is abandoned or disposed of; plus

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    cash distributions paid in respect of equity issued (including incremental distributions on incentive distribution rights) to pay the construction period interest on debt incurred, or to pay construction period distributions on equity issued, to finance the expansion capital expenditures referred to above, in each case, in respect of the period from such financing until the earlier to occur of the date the capital asset is placed in service and the date that it is abandoned or disposed of; less

    all of our operating expenditures (as defined below) after the closing of this offering; less

    the amount of cash reserves established by our general partner to provide funds for future operating expenditures; less

    all working capital borrowings not repaid within twelve months after having been incurred (or repaid with the proceeds of additional working capital borrowings); less

    any loss realized on disposition of an investment capital expenditure.

        Operating surplus does not reflect actual cash on hand that is available for distribution to our unitholders and is not limited to cash generated by our operations. For example, it includes a basket of $15 million that will enable us, if we choose, to distribute as operating surplus cash we receive in the future from non-operating sources such as asset sales, issuances of securities and long-term borrowings that would otherwise be distributed as capital surplus. In addition, the effect of including, as described above, certain cash distributions on equity interests in operating surplus will be to increase operating surplus by the amount of any such cash distributions. As a result, we may also distribute as operating surplus up to the amount of any such cash that we receive from non-operating sources.

        The proceeds of working capital borrowings increase operating surplus and repayments of working capital borrowings are generally operating expenditures, as described below, and thus reduce operating surplus when made. However, if a working capital borrowing is not repaid during the twelve-month period following the borrowing, it will be deemed repaid at the end of such period, thus decreasing operating surplus at such time. When such working capital borrowing is in fact repaid, it will be excluded from operating expenditures because operating surplus will have been previously reduced by the deemed repayment.

        We define operating expenditures in our partnership agreement, and it generally means all of our cash expenditures, including, but not limited to, management fees paid to LGC, taxes, reimbursement of expenses to our general partner or its affiliates, payments made under interest rate hedge agreements or commodity hedge agreements (provided that (1) with respect to amounts paid in connection with the initial purchase of an interest rate hedge contract or a commodity hedge contract, such amounts will be amortized over the life of the applicable interest rate hedge contract or commodity hedge contract and (2) payments made in connection with the termination of any interest rate hedge contract or commodity hedge contract prior to the expiration of its stipulated settlement or termination date will be included in operating expenditures in equal quarterly installments over the remaining scheduled life of such interest rate hedge contract or commodity hedge contract), officer compensation, repayment of working capital borrowings, debt service payments and maintenance capital expenditures, provided that operating expenditures will not include:

    repayment of working capital borrowings deducted from operating surplus pursuant to the penultimate bullet point of the definition of operating surplus above when such repayment actually occurs;

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    payments (including prepayments and prepayment penalties and the purchase price of indebtedness that is repurchased and cancelled) of principal of and premium on indebtedness, other than working capital borrowings;

    expansion capital expenditures;

    investment capital expenditures;

    payment of transaction expenses relating to interim capital transactions;

    distributions to our partners (including distributions in respect of our incentive distribution rights); or

    repurchases of equity interests except to fund obligations under employee benefit plans.

    Capital Surplus

        Capital surplus is defined in our partnership agreement as any distribution of cash in excess of our operating surplus. Accordingly, capital surplus would generally be generated only by the following which (we refer to as "interim capital transactions"):

    borrowings other than working capital borrowings;

    sales of our equity and debt securities; and

    sales or other dispositions of assets for cash, other than inventory, accounts receivable and other assets sold in the ordinary course of business or as part of normal retirement or replacement of assets.

    Characterization of Cash Distributions

        Our partnership agreement requires that we treat all distributions as coming from operating surplus until the sum of all distributions since the closing of this offering equals the operating surplus from the closing of this offering through the end of the quarter immediately preceding that distribution. Our partnership agreement requires that we treat any amount distributed in excess of operating surplus, regardless of its source, as capital surplus. As described above, operating surplus includes up to $15 million, which does not reflect actual cash on hand that is available for distribution to our unitholders. Rather, it is a provision that will enable us, if we choose, to distribute as operating surplus up to this amount that would otherwise be distributed as capital surplus. We do not anticipate that we will make any distributions from capital surplus.

Capital Expenditures

        Maintenance capital expenditures reduce operating surplus, but expansion capital expenditures and investment capital expenditures do not. Maintenance capital expenditures are those capital expenditures required to maintain our long-term operating income or operating capacity. Examples of maintenance capital expenditures include those made to maintain existing contract volumes, including payments to renew existing distribution contracts, or to maintain our sites in leasable condition, such as parking lot or roof replacement/renovations or to replace equipment required to operate our existing business. Maintenance capital expenditures will also include interest (and related fees) on debt incurred and distributions on equity issued (including incremental distributions on incentive distribution rights) to finance all or any portion of the

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construction or development of a replacement asset that is paid in respect of the period that begins when we enter into a binding obligation to commence constructing or developing a replacement asset and ending on the earlier to occur of the date that any such replacement asset commences commercial service and the date that it is abandoned or disposed of. Capital expenditures made solely for investment purposes will not be considered maintenance capital expenditures.

        Expansion capital expenditures are those capital expenditures that we expect will increase our operating income or operating capacity over the long term. Examples of expansion capital expenditures include the acquisition of new sites or the construction or expansion of convenience stores or carwashes at our sites, to the extent such capital expenditures are expected to expand our long-term operating income or operating capacity. Expansion capital expenditures will also include interest (and related fees) on debt incurred and distributions on equity issued (including incremental distributions on incentive distribution rights) to finance all or any portion of the construction of such capital improvement in respect of the period that commences when we enter into a binding obligation to commence construction of a capital improvement and ending on the earlier to occur of the date any such capital improvement commences commercial service and the date that it is disposed of or abandoned. Capital expenditures made solely for investment purposes will not be considered expansion capital expenditures.

        Investment capital expenditures are those capital expenditures that are neither maintenance capital expenditures nor expansion capital expenditures. Investment capital expenditures largely will consist of capital expenditures made for investment purposes. Examples of investment capital expenditures include traditional capital expenditures for investment purposes, such as purchases of securities, as well as other capital expenditures that might be made in lieu of such traditional investment capital expenditures, such as the acquisition of a capital asset for investment purposes, but which are not expected to expand, for more than the short term, our operating income or operating capacity.

        Neither investment capital expenditures nor expansion capital expenditures are included in operating expenditures, and thus will not reduce operating surplus. Because expansion capital expenditures include interest payments (and related fees) on debt incurred to finance all or a portion of the construction or improvement of a capital asset in respect of a period that begins when we enter into a binding obligation to commence construction of a capital improvement and ending on the earlier to occur of the date any such capital asset commences commercial service and the date that it is abandoned or disposed of, such interest payments also do not reduce operating surplus. Losses on disposition of an investment capital expenditure will reduce operating surplus when realized and cash receipts from an investment capital expenditure will be treated as a cash receipt for purposes of calculating operating surplus only to the extent the cash receipt is a return on principal.

        Capital expenditures that are made in part for maintenance capital purposes, investment capital purposes and/or expansion capital purposes will be allocated as maintenance capital expenditures, investment capital expenditures or expansion capital expenditures by our general partner.

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Partnership Interests

    Common Units

        At the closing of this offering, our common units and incentive distribution rights will be the only partnership interests entitled to cash distributions. Please see "Description of the Common Units."

    Subordinated Units

        The subordinated units will generally share pro rata with our common units with respect to the payment of distributions except that, for each quarter during the subordination period, holders of the subordinated units will not be entitled to receive any distribution from operating surplus until the common units have received the minimum quarterly distribution from operating surplus plus any arrearages in the payment of the minimum quarterly distribution from prior quarters. The subordinated units will not accrue arrearages.

Subordination Period

    General

        Our partnership agreement provides that, during the subordination period (which we describe below), the common units will have the right to receive distributions from operating surplus each quarter in an amount equal to $0.4375 per common unit, which amount is defined in our partnership agreement as the minimum quarterly distribution, plus any arrearages in the payment of the minimum quarterly distribution on the common units from prior quarters, before any distributions of cash from operating surplus may be made on the subordinated units. The practical effect of the subordination period is to increase the likelihood that during such period there will be sufficient cash from operating surplus to pay the minimum quarterly distribution on the common units.

    Subordination Period

        Except as described below, the subordination period will begin on the closing date of this offering and will expire on the first business day after the distribution to unitholders in respect of any quarter, beginning with the quarter ending December 31, 2015 if each of the following has occurred:

    distributions of cash from operating surplus on each of the outstanding common and subordinated units equaled or exceeded the minimum quarterly distribution of $0.4375 per unit for each of the three consecutive, non-overlapping four-quarter periods immediately preceding that date;

    the "adjusted operating surplus" (as defined below) generated during each of the three consecutive, non-overlapping four-quarter periods immediately preceding that date equaled or exceeded the sum of the minimum quarterly distribution on all of the outstanding common and subordinated units during those periods on a fully diluted weighted average basis; and

    there are no arrearages in payment of the minimum quarterly distribution on the common units.

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    Early Termination of Subordination Period

        Notwithstanding the foregoing, the subordination period will automatically terminate on the first business day after the distribution to unitholders in respect of any quarter, beginning with the quarter ending December 31, 2013 if each of the following has occurred:

    distributions of cash from operating surplus on each of the outstanding common and subordinated units equaled or exceeded $2.6250 (150.0% of the annualized minimum quarterly distribution) for each quarter in the four-quarter period immediately preceding that date;

    the "adjusted operating surplus" (as defined below) generated during the four-quarter period immediately preceding that date equaled or exceeded the sum of $2.6250 (150.0% of the annualized minimum quarterly distribution) on all of the outstanding units on a fully diluted weighted average basis and the related distribution on the incentive distribution rights; and

    there are no arrearages in payment of the minimum quarterly distribution on the common units.

    Expiration Upon Removal of the General Partner

        In addition, if the unitholders remove our general partner other than for cause:

    the subordinated units held by any person will immediately and automatically convert into common units on a one-for-one basis, provided (1) neither such person nor any of its affiliates voted any of its units in favor of the removal and (2) such person is not an affiliate of the successor general partner; and

    if all of the subordinated units convert pursuant to the foregoing, all cumulative arrearages on the common units will be extinguished and the subordination period will end.

    Expiration of the Subordination Period

        When the subordination period ends, each outstanding subordinated unit will convert into one common unit and will then participate pro-rata with the other common units in cash distributions.

    Adjusted Operating Surplus

        Adjusted operating surplus is intended to reflect the cash generated from operations during a particular period and therefore excludes net increases in working capital borrowings and net drawdowns of reserves of cash generated in prior periods. Adjusted operating surplus consists of:

    operating surplus generated with respect to that period (excluding any amounts attributable to the items described in the first bullet point under "—Operating Surplus and Capital Surplus—Operating Surplus" above); less

    the amount of any net increase in working capital borrowings with respect to that period; less

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    the amount of any net decrease in cash reserves for operating expenditures with respect to that period not relating to an operating expenditure made with respect to that period; plus

    the amount of any net decrease in working capital borrowings with respect to that period; plus

    the amount of any net increase in cash reserves for operating expenditures with respect to that period required by any debt instrument for the repayment of principal, interest or premium; plus

    the amount of any net decrease made in subsequent periods in cash reserves for operating expenditures initially established with respect to such period to the extent such decrease results in a reduction of adjusted operating surplus in subsequent periods pursuant to the third bullet point above.

Distributions of Cash From Operating Surplus During the Subordination Period

        If we make a distribution from operating surplus for any quarter during the subordination period, our partnership agreement requires that we make the distribution in the following manner:

    first, 100.0% to the common unitholders, pro rata, until we distribute for each common unit an amount equal to the minimum quarterly distribution for that quarter and any arrearages in payment of the minimum quarterly distribution for prior quarters;

    second, 100.0% to the subordinated unitholders, pro rata, until we distribute for each subordinated unit an amount equal to the minimum quarterly distribution for that quarter; and

    thereafter, in the manner described in "—Incentive Distribution Rights" below.

        The preceding discussion is based on the assumption that we do not issue additional classes of equity interests.

Distributions of Cash From Operating Surplus After the Subordination Period

        If we make a distribution from operating surplus for any quarter after the subordination period, our partnership agreement requires that we make the distribution in the following manner:

    first, 100.0% to all common unitholders, pro rata, until we distribute for each common unit an amount equal to the minimum quarterly distribution for that quarter; and

    thereafter, in the manner described in "—Incentive Distribution Rights" below.

        The preceding discussion is based on the assumption that we do not issue additional classes of equity interests.

General Partner Interest

        Our general partner owns a non-economic general partner interest in us and thus will not be entitled to distributions that we make prior to our liquidation in respect of such interest.

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Incentive Distribution Rights

        Incentive distribution rights represent the right to receive an increasing percentage (15.0%, 25.0% and 50.0%) of quarterly distributions from operating surplus after the minimum quarterly distribution and the target distribution levels have been achieved. Upon the closing of this offering, our general partner will hold all of our incentive distribution rights, but may transfer these rights separately from its non-economic general partner interest.

        The following discussion assumes that there are no arrearages on common units and that our general partner continues to own the incentive distribution rights.

        If for any quarter:

    we have distributed cash from operating surplus to the common and subordinated unitholders in an amount equal to the minimum quarterly distribution; and

    we have distributed cash from operating surplus on outstanding common units in an amount necessary to eliminate any cumulative arrearages in payment of the minimum quarterly distribution;

then, our partnership agreement requires that any incremental distributions from operating surplus for that quarter will be made among the unitholders and the general partner in the following manner:

    first, 100.0% to all unitholders, pro rata, until each unitholder receives a total of $0.5031 per unit for that quarter (the "first target distribution");

    second, 85.0% to all unitholders, pro rata, and 15.0% to the holders of incentive distribution rights, until each unitholder receives a total of $0.5469 per unit for that quarter (the "second target distribution");

    third, 75.0% to all unitholders, pro rata, and 25.0% to the holders of the incentive distribution rights, until each unitholder receives a total of $0.6563 per unit for that quarter (the "third target distribution"); and

    thereafter, 50.0% to all unitholders, pro rata, and 50.0% to the holders of the incentive distribution rights.

Percentage Allocations of Cash Distributions From Operating Surplus

        The following table illustrates the percentage allocations of the cash distributions from operating surplus between the unitholders and our general partner based on the specified target distribution levels. The amounts set forth under "Marginal Percentage Interest in Distributions" are the percentage interests of our general partner and the unitholders in any cash distributions from operating surplus we distribute up to and including the corresponding amount in the column "Total Quarterly Distribution Per Common and Subordinated Unit," until cash we distribute from operating surplus reaches the next target distribution level, if any. The percentage interests shown for the unitholders and the general partner for the minimum quarterly distribution are also applicable to quarterly distribution amounts that are less than the minimum

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quarterly distribution. The percentage interests set forth below for our general partner assume the general partner has not transferred its incentive distribution rights.

 
  Total Quarterly
Distribution Per
Common and
Subordinated Unit
  Marginal Percentage Interest in
Distribution
 
 
   
  General
Partner
 
 
  Target Amount   Unitholders  

Minimum Quarterly Distribution

  $0.4375     100 %   0 %

First Target Distribution

  $0.4375 up to $0.5031     100 %   0 %

Second Target Distribution

  above $0.5031 up to $0.5469     85 %   15 %

Third Target Distribution

  above $0.5469 up to $0.6563     75 %   25 %

Thereafter

  above $0.6563     50 %   50 %

General Partner's Right to Reset Incentive Distribution Levels

        Our general partner, as the initial holder of our incentive distribution rights, has the right under our partnership agreement to elect to relinquish the right to receive incentive distribution payments based on the initial cash target distribution levels and to reset, at higher levels, the target distribution levels upon which the incentive distribution payments to our general partner would be set. If our general partner transfers all or a portion of our incentive distribution rights in the future, then the holder or holders of a majority of our incentive distribution rights will be entitled to exercise this right. The following discussion assumes that our general partner holds all of the incentive distribution rights at the time that a reset election is made. The right to reset the target distribution levels upon which the incentive distributions are based may be exercised, without approval of our unitholders or the conflicts committee of our general partner, at any time when there are no subordinated units outstanding and we have made cash distributions to the holders of the incentive distribution rights at the highest level of incentive distribution for each of the prior four consecutive fiscal quarters. The reset target distribution levels will be higher than the target distribution levels prior to the reset such that there will be no incentive distributions paid under the reset target distribution levels until cash distributions per unit following this event increase as described below. We anticipate that our general partner would exercise this reset right in order to facilitate acquisitions or internal growth projects that would otherwise not be sufficiently accretive to cash distributions per common unit, taking into account the existing levels of incentive distribution payments being made to our general partner.

        In connection with the resetting of the target distribution levels and the corresponding relinquishment by our general partner of incentive distribution payments based on the target cash distributions prior to the reset, our general partner will be entitled to receive a number of newly issued common units based on a predetermined formula described below that takes into account the "cash parity" value of the cash distributions related to the incentive distribution rights received by our general partner for the quarter prior to the reset event as compared to the average cash distributions per common unit during this period.

        The number of common units that our general partner would be entitled to receive from us in connection with a resetting of the minimum quarterly distribution amount and the target distribution levels then in effect would be equal to the quotient determined by dividing (x) the amount of cash distributions received by our general partner in respect of its incentive distribution rights for the most recent quarterly distribution by (y) the amount of cash distributed per common unit for such quarter. Our general partner would be entitled to receive distributions in respect of these common units pro rata in subsequent periods.

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        Following a reset election, quarterly baseline distribution amount will be calculated as an amount equal to the cash distribution amount per unit for the fiscal quarter immediately preceding the reset election (which amount we refer to as the "reset minimum quarterly distribution") and the target distribution levels will be reset to be correspondingly higher such that we would make distributions from operating surplus for each quarter thereafter as follows:

    first, 100.0% to all common unitholders, pro rata, until each unitholder receives an amount per unit equal to 115.0% of the reset minimum quarterly distribution for that quarter;

    second, 85.0% to all common unitholders, pro rata, and 15.0% to our general partner in its capacity as the holder of our incentive distribution rights, until each unitholder receives an amount per unit equal to 125.0% of the reset minimum quarterly distribution for the quarter;

    third, 75.0% to all common unitholders, pro rata, and 25.0% to our general partner in its capacity as the holder of our incentive distribution rights, until each unitholder receives an amount per unit equal to 150.0% of the reset minimum quarterly distribution for the quarter; and

    thereafter, 50.0% to all common unitholders, pro rata, and 50.0% to our general partner in its capacity as the holder of our incentive distribution rights.

        Because a reset election can only occur after the subordination period expires, the reset minimum quarterly distribution will have no significance except as a baseline for the target distribution levels.

        The following table illustrates the percentage allocation of distributions from operating surplus between the unitholders and our general partner in its capacity as the holder of our incentive distribution rights at various cash distribution levels (1) pursuant to the cash distribution provisions of our partnership agreement in effect at the closing of this offering, as well as (2) following a hypothetical reset of the target distribution levels based on the assumption that the quarterly cash distribution amount per common unit during the prior fiscal quarter immediately preceding the reset election was $0.7000.

 
   
  Marginal Percentage
Interest in Distribution
   
 
  Quarterly Distribution
Per Unit Prior to Reset
  Unitholders   General Partner
(In its capacity
as the holder
of our incentive
distribution
rights)
  Quarterly Distribution
Per Unit Following
Hypothetical Reset

Minimum Quarterly
Distribution

  $0.4375     100 %   0 % $0.7000

First Target Distribution

  above $0.4375
up to $0.5031
    100 %   0 % above $0.7000
up to $0.8050(1)

Second Target Distribution

  above $0.5031
up to $0.5469
    85 %   15 % above $0.8050
up to $0.8750(2)

Third Target Distribution

  above $0.5469
up to $0.6563
    75 %   25 % above $0.8750
up to $1.0500(3)

Thereafter

  above $0.6563     50 %   50 % above $1.0500

(1)
This amount is 115.0% of the hypothetical reset minimum quarterly distribution.

(2)
This amount is 125.0% of the hypothetical reset minimum quarterly distribution.

(3)
This amount is 150.0% of the hypothetical reset minimum quarterly distribution.

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        The following table illustrates the total amount of distributions from operating surplus that would be distributed to the unitholders and our general partner in respect of its incentive distribution rights, based on the amount distributed per quarter for the quarter immediately prior to the reset. The table assumes that immediately prior to the reset there would be 15,050,000 common units outstanding and the distribution to each common unit would be $0.7000 per quarter for the quarter prior to the reset.

 
  Prior to Reset  
 
   
 
Cash Distributions to
General Partner (In its capacity
as the holder of our incentive
distribution rights)
 
 
  Quarterly
Distributions
Per Unit
  Cash
Distributions
to Common
Unitholders
  Incentive
Distribution
Rights
  Total
Distributions
 

Minimum Quarterly Distribution

  $0.4375   $ 6,584,375   $   $ 6,584,375  

First Target Distribution

  above $0.4375
up to $0.5031
    987,656         987,656  

Second Target Distribution

  above $0.5031
up to $0.5469
    658,438     116,195     774,632  

Third Target Distribution

  above $0.5469
up to $0.6563
    1,646,094     548,698     2,194,792  
                   

Thereafter

  above $0.6563   $ 658,438     658,438   $ 1,316,875  
                   

      $ 10,535,000   $ 1,323,330   $ 11,858,330  
                   

        The following table illustrates the total amount of distributions from operating surplus that would be distributed to the unitholders and our general partner in respect of its incentive distribution rights, with respect to the quarter in which the reset occurs. The table reflects that as a result of the reset there would be 16,940,472 common units outstanding, and the distribution to each common unit would be $0.7000. The number of common units to be issued to our general partner upon the reset is calculated by dividing (1) the amount received by our general partner in respect of its incentive distribution rights for the quarters prior to the reset as shown in the table above, or $1,323,330, by (2) the amount distributed on each common unit for the quarter prior to the reset as shown in the table above, or $0.7000.

 
  After the Reset  
 
   
   
  Cash Distributions to
General Partner
   
 
 
   
  Cash
Distributions
to Common
Unitholders
   
 
 
  Quarterly
Distributions
Per Unit
  New
Common
Units
  Incentive
Distribution
Rights
  Total   Total
Distributions
 

Minimum Quarterly
Distribution

  $0.7000   $ 10,535,000   $ 1,323,330   $   $ 1,323,330   $ 11,858,330  

First Target Distribution

  above $0.7000
up to $0.8050
                     

Second Target Distribution

  above $0.8050
up to $0.8750
                     

Third Target Distribution

  above $0.8750
up to $1.0500
                     
                           

Thereafter

  above $1.0500                      
                           

      $ 10,535,000   $ 1,323,330   $   $ 1,323,330   $ 11,858,330  
                           

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        Our general partner in respect of its incentive distribution rights will be entitled to cause the target distribution levels to be reset on more than one occasion, provided that it may not make a reset election except at a time when it has received incentive distributions for the prior four consecutive fiscal quarters based on the highest level of incentive distributions that it is entitled to receive under our partnership agreement.

Distributions From Capital Surplus

    How Distributions From Capital Surplus Will Be Made

        Our partnership agreement requires that we make distributions of cash from capital surplus, if any, in the following manner:

    first, 100.0% to all common and subordinated unitholders, pro rata until the minimum quarterly distribution is reduced to zero, as described below;

    second, 100.0% to the common unitholders, pro rata, until we distribute for each common unit, an amount of cash from capital surplus equal to any unpaid arrearages in payment of the minimum quarterly distribution on the common units; and

    thereafter, we will make all distributions of cash from capital surplus as if they were from operating surplus.

    Effect of a Distribution From Capital Surplus

        Our partnership agreement treats a distribution of cash from capital surplus as the repayment of the initial unit price from this offering, which is a return of capital. Each time a distribution of cash from capital surplus is made, the minimum quarterly distribution and the target distribution levels will be reduced in the same proportion as the corresponding reduction in relation to the fair market value of the common units prior to the announcement of the distribution. Because distributions of capital surplus will reduce the minimum quarterly distribution and target distribution levels after any of these distributions are made, it may be easier for our general partner to receive incentive distributions and for the subordinated units to convert into common units. However, any distribution of capital surplus before the minimum quarterly distribution is reduced to zero cannot be applied to the payment of the minimum quarterly distribution or any arrearages.

        If we reduce the minimum quarterly distribution and the target distribution levels to zero, all future distributions from operating surplus will be made such that 50.0% is paid to all unitholders, pro rata, and 50.0% is paid to the holders of the incentive distribution rights, pro rata.

Adjustment to the Minimum Quarterly Distribution and Target Distribution Levels

        In addition to adjusting the minimum quarterly distribution and target distribution levels to reflect a distribution of capital surplus, if we combine our common units into fewer common units or subdivide our common units into a greater number of common units, our partnership agreement specifies that the following items will be proportionately adjusted:

    the minimum quarterly distribution;

    the target distribution levels;

    the unrecovered initial unit price;

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    the per unit amount of any outstanding arrearages in payment of the minimum quarterly distribution on the common units; and

    the number of subordinated units.

        For example, if a two-for-one split of the common units should occur, the minimum quarterly distribution, the target distribution levels and the unrecovered initial unit price would each be reduced to 50.0% of its initial level. If we combine our common units into a lesser number of units or subdivide our common units into a greater number of units, we will combine or subdivide our subordinated units using the same ratio applied to the common units. Our partnership agreement provides that we do not make any adjustment by reason of the issuance of additional units for cash or property.

        In addition, if as a result of a change in law or interpretation thereof, we or any of our subsidiaries is treated as an association taxable as a corporation or is otherwise subject to additional taxation as an entity for U.S. federal, state, local or non-U.S. income or withholding tax purposes, our general partner may, in its sole discretion, reduce the minimum quarterly distribution and the target distribution levels for each quarter by multiplying each distribution level by a fraction, the numerator of which is cash available for distribution for that quarter (after deducting our general partner's estimate of our additional aggregate liability for the quarter for such income and withholdings taxes payable by reason of such change in law or interpretation) and the denominator of which is the sum of (1) cash available for distribution for that quarter, plus (2) our general partner's estimate of our additional aggregate liability for the quarter for such income and withholding taxes payable by reason of such change in law or interpretation thereof. To the extent that the actual tax liability differs from the estimated tax liability for any quarter, the difference will be accounted for in distributions with respect to subsequent quarters.

Distributions of Cash Upon Liquidation

    General

        If we dissolve in accordance with the partnership agreement, we will sell or otherwise dispose of our assets in a process called liquidation. We will first apply the proceeds of liquidation to the payment of our creditors. We will distribute any remaining proceeds to the unitholders and the holders of the incentive distribution rights in accordance with their capital account balances, as adjusted to reflect any gain or loss upon the sale or other disposition of our assets in liquidation.

        The allocations of gain and loss upon liquidation are intended, to the extent possible, to entitle the holders of common units to a preference over the holders of subordinated units upon our liquidation, to the extent required to permit common unitholders to receive their unrecovered initial unit price plus the minimum quarterly distribution for the quarter during which liquidation occurs plus any unpaid arrearages in payment of the minimum quarterly distribution on the common units. However, there may not be sufficient gain upon our liquidation to enable the common unitholders to fully recover all of these amounts, even though there may be cash available for distribution to the holders of subordinated units. Any further net gain recognized upon liquidation will be allocated in a manner that takes into account the incentive distribution rights of our general partner.

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    Manner of Adjustments for Gain

        If our liquidation occurs before the end of the subordination period, we will generally allocate any gain to the partners in the following manner:

    first, to our general partner to the extent of certain prior losses specially allocated to our general partner;

    second, 100.0% to the common unitholders, pro rata, until the capital account for each common unit is equal to the sum of: (1) the unrecovered initial unit price; (2) the amount of the minimum quarterly distribution for the quarter during which our liquidation occurs; and (3) any unpaid arrearages in payment of the minimum quarterly distribution;

    third, 100.0% to the subordinated unitholders, pro rata, until the capital account for each subordinated unit is equal to the sum of: (1) the unrecovered initial unit price; and (2) the amount of the minimum quarterly distribution for the quarter during which our liquidation occurs;

    fourth, 100.0% to all unitholders, pro rata, until we allocate under this paragraph an amount per unit equal to: (1) the sum of the excess of the first target distribution per unit over the minimum quarterly distribution per unit for each quarter of our existence; less (2) the cumulative amount per unit of any distributions of cash from operating surplus in excess of the minimum quarterly distribution per unit that we distributed to the unitholders, pro rata, for each quarter of our existence;

    fifth, 85.0% to all unitholders, pro rata, and 15.0% to our general partner, until we allocate under this paragraph an amount per unit equal to:(1) the sum of the excess of the second target distribution per unit over the first target distribution per unit for each quarter of our existence; less (2) the cumulative amount per unit of any distributions of cash from operating surplus in excess of the first target distribution per unit that we distributed 85.0% to the unitholders, pro rata, and 15.0% to the general partner for each quarter of our existence;

    sixth, 75.0% to all unitholders, pro rata, and 25.0% to the general partner, until we allocate under this paragraph an amount per unit equal to: (1) the sum of the excess of the third target distribution per unit over the second target distribution per unit for each quarter of our existence; less (2) the cumulative amount per unit of any distributions of cash from operating surplus in excess of the second target distribution per unit that we distributed 75.0% to the unitholders, pro rata, and 25.0% to the general partner for each quarter of our existence; and

    thereafter, 50.0% to all unitholders, pro rata, and 50.0% to the general partner.

        The percentage interests set forth above for our general partner assume the general partner has not transferred the incentive distribution rights.

        If the liquidation occurs after the end of the subordination period, the distinction between common units and subordinated units will disappear, so that clause (3) of the second bullet point above and all of the third bullet point above will no longer be applicable.

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        We may make special allocations of gain among the partners in a manner to create economic uniformity among the common units into which the subordinated units convert and the common units held by public unitholders.

    Manner of Adjustments for Losses

        If our liquidation occurs before the end of the subordination period, we will generally allocate any loss to our general partner and the unitholders in the following manner:

    first, 100.0% to the subordinated unitholders, pro rata, until the capital account for each subordinated unit has been reduced to zero;

    second, 100.0% to the common unitholders, pro rata, until the capital accounts for each common unit has been reduced to zero;

    third, 100.0% to all unitholders, pro rata, until the allocation would cause the capital accounts for each unit to have a deficit balance; and

    thereafter, 100.0% to our general partner.

        If the liquidation occurs after the end of the subordination period, the distinction between common units and subordinated units will disappear, so that all of the first bullet point above will no longer be applicable.

        We may make special allocations of loss among the partners in a manner to create economic uniformity among the common units into which the subordinated units convert and the common units held by public unitholders.

    Adjustments to Capital Accounts

        Our partnership agreement requires that we make adjustments to capital accounts upon the issuance of additional units. In this regard, our partnership agreement specifies that we allocate any unrealized and, for U.S. federal income tax purposes, unrecognized gain resulting from the adjustments to the unitholders and the general partner in its capacity as the holder of our incentive distribution rights in the same manner as we allocate gain upon liquidation. In the event that we make positive adjustments to the capital accounts upon the issuance of additional units, our partnership agreement requires that we generally allocate any later negative adjustments to the capital accounts resulting from the issuance of additional units or upon our liquidation in a manner which results, to the extent possible, in the partners' capital account balances equaling the amount which they would have been if no earlier positive adjustments to the capital accounts had been made. By contrast to the allocations of gain, and except as provided above, we generally will allocate any unrealized and unrecognized loss resulting from the adjustments to capital accounts upon the issuance of additional units to the unitholders based on their respective percentage ownership of us. In this manner, prior to the end of the subordination period, we generally will allocate any such loss equally with respect to our common and subordinated units. In the event we make negative adjustments to the capital accounts as a result of such loss, future positive adjustments resulting from the issuance of additional units will be allocated in a manner designed to reverse the prior negative adjustments, and special allocations will be made upon liquidation in a manner that results, to the extent possible, in our unitholders' capital account balances equaling the amounts they would have been if no earlier adjustments for loss had been made.

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SELECTED HISTORICAL AND PRO FORMA
COMBINED FINANCIAL AND OPERATING DATA

        We were formed in December 2011 and do not have our own historical financial statements for periods prior to our formation. The following table presents selected combined financial and operating data of our predecessor, which includes the business of LGC and its subsidiaries and affiliates that will be contributed to us in connection with this offering, as of the dates and for the periods indicated.

        The selected combined financial data has been prepared on the following basis:

    the selected combined financial data presented as of December 31, 2007, 2008 and 2009 and for the years ended December 31, 2007 and 2008 is derived from the unaudited combined financial statements, which are not included in this prospectus;

    the selected combined financial data presented as of December 31, 2010 and 2011 and for the years ended December 31, 2009, 2010 and 2011 is derived from the audited combined financial statements, which are included elsewhere in this prospectus; and

    the selected combined financial data presented as of June 30, 2012 and for the six months ended June 30, 2011 and 2012 is derived from the unaudited combined financial statements, which are included elsewhere in this prospectus.

        The selected pro forma combined financial data presented as of June 30, 2012 and for the year ended December 31, 2011 and the six months ended June 30, 2012 is derived from the unaudited pro forma condensed combined financial statements included elsewhere in this prospectus. Our unaudited pro forma condensed combined financial statements give pro forma effect to:

    (i) the contribution by the Topper Group to us of the contributed entities or the merger of the contributed entities with us and (ii) the transfer by the non-contributed entities to us of certain (A) supply and distribution agreements, (B) real property and leasehold interests, (C) personal property and (D) other assets and liabilities relating to the motor fuel distribution business or the ownership of sites, in exchange for an aggregate of 1,525,000 common units and 5,052,000 subordinated units;

    the contribution by LGC of certain assets and liabilities to us in exchange for 2,473,000 subordinated units;

    our entry into the new credit facility as described in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—New Credit Agreement;"

    the issuance by us to the public of 6,000,000 common units and the use of the net proceeds from this offering as described under "Use of Proceeds," including the distribution of an aggregate $20.0 million to the Topper Group and LGC as reimbursement for certain capital expenditures made by the Topper Group and LGC with respect to the assets they contributed and/or consideration for the purchase of all of the assets of one or more of the contributed entities;

    our entry into lease agreements and a wholesale supply agreement with LGO as described in "Certain Relationships and Related Transactions—Agreements with Affiliates—LGO Lease Agreements" and "Certain Relationships and Related Transactions—Agreements with Affiliates—LGO Wholesale Supply Agreement;"

    our entry into an omnibus agreement as described in "Certain Relationships and Related Party Transactions—Agreements with Affiliates—Omnibus Agreement;" and

    the exclusion of certain assets that are not being contributed to us in connection with this offering as they do not fit our strategic or geographic plans, retail motor fuel assets and operations, environmental indemnification assets and other miscellaneous assets that

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      are not being contributed to us and environmental liabilities and other miscellaneous liabilities that will not be our responsibility.

        The unaudited pro forma condensed combined balance sheet data assumes the items listed above occurred as of June 30, 2012. The unaudited pro forma condensed combined statements of operations data assume the items listed above occurred as of the beginning of the periods presented.

        For a detailed discussion of certain of the selected combined financial data contained in the following table, please read "Management's Discussion and Analysis of Financial Condition and Results of Operations." The following table should also be read in conjunction with "Use of Proceeds," "Summary—The Transactions," the combined financial statements and related notes and our pro forma condensed combined financial statements and related notes included elsewhere in this prospectus. Among other things, the financial statements included elsewhere in this prospectus include more detailed information regarding the basis of presentation for the information in the following table.

        The following table presents the non-GAAP financial measures, EBITDA and Adjusted EBITDA, which we use in our business as they are important supplemental measures of our performance and liquidity. We explain these measures under "Selected Historical and Pro Forma Combined Financial and Operating Data" and reconcile them to net income, their most directly comparable financial measures calculated and presented in accordance with GAAP below.

 
  Our Predecessor    
  Lehigh Gas Partners LP
Pro Forma
 
 
  Year Ended
December 31,
   
  Six Months
Ended
June 30,
   
   
 
Six Months
Ended
June 30,

 
 
 


 


  Year Ended
December 31,

 
 
  2007   2008    
  2009   2010   2011   2011   2012   2011   2012  
 
   
   
   
 
 
  (unaudited)
   
   
   
   
   
  (unaudited)
   
  (unaudited)
 
 
  (in thousands)
 

Statement of Operations Data:

                                                                   

Revenues:

                                                                   

Revenues from fuel sales

  $ 666,218   $ 573,610       $ 490,261   $ 847,090   $ 1,242,040       $ 636,479   $ 546,911       $ 1,134,183   $ 535,493  

Revenues from fuel sales to affiliates

    175,259     399,204         310,794     329,974     365,106         139,538     318,408         659,488     303,690  

Rental income

    7,489     7,567         10,508     11,908     12,748         6,065     6,084         10,228     5,229  

Rental income from affiliates

    2,855     6,025         10,324     7,169     7,792         3,422     2,729         11,149     5,830  

Revenues from retail merchandise and other

                59     1,939     1,389         650     7         14     7  
                                                   

Total revenues

    851,821     986,406         821,946     1,198,080     1,629,075         786,154     874,139         1,815,062     850,249  

Costs and Expenses:

                                                                   

Cost of revenues from fuel sales

    644,785     559,116         472,359     820,959     1,209,719         621,402     534,226         1,107,153     522,868  

Cost of revenues from fuel sales to affiliates

    173,925     394,427         305,335     324,963     359,005         136,892     312,272         649,318     298,485  

Cost of revenues for retail merchandise and other

                7     1,774     1,068         494             2      

Rent expense

    4,982     7,121         4,494     6,422     9,402         4,521     4,862         7,259     4,331  

Operating expenses

    14,579     5,525         4,407     4,211     6,634         3,374     3,202         3,590     1,352  

Depreciation and amortization

    3,742     3,846         8,172     12,085     12,073         5,436     8,428         10,946     8,057  

Selling, general and administrative expenses

    1,690     4,193         13,389     13,099     12,709         6,824     10,558         9,190     4,955  

(Gain) loss on sale of assets

    (3 )   (1,785 )       (752 )   271     (3,188 )       (1,632 )   (2,973 )       (3,188 )   (2,973 )
                                                   

Total costs and operating expenses

    843,700     972,443         807,411     1,183,784     1,607,422         777,311     870,575         1,784,270     837,075  
                                                   

Operating income

    8,121     13,963         14,535